Italy’s Startup Ecosystem Shrinks but Becomes More Digital and Specialized

In 2025, the decline in innovative startups in Italy continued, dropping to 11,820 units (-19% from the 2021 peak). The ecosystem is increasingly concentrated in the North (Lombardy 31%) and digitally focused, with 29% of new startups focusing on Artificial Intelligence and Data Analytics.

The decline in innovative startups in Italy continues in 2025. According to Cerved’s Innovative Startup Observatory, new registrations in the Company Register fell from 2,027 in 2024 to 1,986 in 2025 (-2%). The total number of innovative startups stood at 11,820, a decrease of 2.7% compared to the previous year and 19% compared to the peak reached in 2021.

Alongside the numerical reduction, a growing concentration is evident in both sectors and geographic areas. Today, 61% of innovative startups operate in IT services and software development, while 13% are active in research and development; the remainder is distributed across numerous other sectors.

The phenomenon is also highly concentrated geographically: 56% of startups are based in Northern Italy, with Lombardy alone accounting for 31% of the total and Milan 23%. The presence of women in leadership roles also remains limited. In 2025, startups with at least one woman in a decision-making position will represent 23% of the total, while female CEOs represent approximately 17%: these levels are in line with those of 2020, after the growth recorded through 2023.

In this context, the Italian innovative startups ecosystem today appears smaller than in the past, but increasingly specialized and oriented toward advanced digital technologies.

Cerved’s Observatory shows a transitional ecosystem, still dynamic, but smaller and more specialized, oriented toward deep digital technologies in advanced fields such as AI, IoT, and robotics. In the coming years, sustainable growth will depend on the ability to broaden the base of the industrial sectors involved, strengthen investments and support services in underserved regions, foster the diversification of entrepreneurial teams, and accelerate the transition to complex and impactful technologies.

Innovative startups ecosystem downsizing after a decade of growth. Geographic distribution:

The 2017-2025 trend clearly shows the trajectory of the phenomenon: after an intense expansion cycle (+69% between 2017 and 2021), from 2022 onwards, innovative startups began to decline: from 14,669 in 2021 to 11,820 in 2025 (-19%), equal to 0.55% of all joint-stock companies. This is due to a tightening of competitive standards, a natural selection of less sustainable initiatives, more complex macroeconomic dynamics, and a still understaffed national funding environment.

The geographic distribution in 2025 is heavily skewed toward the North (about 56%), driven by Lombardy (31%) and especially Milan (23%). Central Italy accounts for only 20%, with Rome in second place among the provinces, while the South and the Islands account for about 25%, with Naples, Bari, and Salerno leading the way.

A comparison with 2024 also confirms this polarization in innovative startups: 58% of new startups were founded in the North (30% in Lombardy, 8.4% in Emilia-Romagna, 6.4% in Piedmont, and 6.1% in Veneto). Lazio stands out in Central Italy (13.2% versus 11.6% in 2024), while in the South, Campania experiences a sharp decline, from 11% to 6% of new registrations. Among the ten most dynamic provinces are Milan, Turin, Bergamo, Genoa, Brescia, Rome, Bologna, Naples, Bari, and Catania.

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(Featured image by jarmoluk via Pixabay)

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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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