Startup Rounds in which Italian Business Angels Participated Raised Over 935M

The weight of Italian business angels in investment deals in startups, either Italian or with Italian founders, is increasingly relevant. In 2021, Italian business angels participated – independently, in syndication with VC funds, and through equity crowdfunding campaigns – in investment deals totaling $1 billion (€935.8 million), an amount more than doubled from the $432.7 million (€402.5 million) in 2020.

That was revealed by the analysis that IBAN, the Italian Association of Business Angels, carried out with its Survey 2021, an annual analysis of the Italian informal venture capital or angel investing market conducted under the scientific supervision of Professor Vincenzo Capizzi of the University of Eastern Piedmont and SDA Bocconi.

Paolo Anselmo, President of IBAN, commented, “The role of business angels in venture capital in Italy continues to grow in 2021. More than one out of every two deals and more than half of the approximately one billion raised in Italian startup investment deals in the last year involves business angels. Italian individual investors are also confirmed to be more active than those in other European countries, such as France: in fact, in 2021 French business angels independently invested about $75 million (€70 million), while in Italy this figure was more than $97.8 million (€91 million). A good $22.6 million (€21 million) more invested by Italian business angels without the support of funds, in a market, such as the French venture capital market, that is about six times higher than the Italian one in terms of amounts invested in startups.”

Compared to 2020, the amount that business angels independently invested in Italian startups also almost doubled, reaching $98 million (€91 million) for 100 investment deals in 2021, compared to $55 million (€51 million) for 96 deals in 2020. The data show that the average business angel investment per deal in autonomy has also almost doubled.

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Business angels invest mainly in cordate with funds

Investment in syndication with VC funds is confirmed to be prevalent for Italian business angels, accounting for 72 percent of the deals monitored by the IBAN Survey: an almost threefold increase in the amounts raised, reaching $873 million (€812 million) in 2021 compared to $349 (€325 million) in 2020, for 116 deals compared to 108 in 2020.

More than half of the amounts invested per target company are over $537 million (€500 million) (compared to 20 percent in 2020), with 15 percent of investments going over $2.15 million (€2 million) and most investments (42 percent) cutting between $537 million and $2.15 million (€500 million and €2 million).

Increasing investment by BAs in equity crowdfunding campaigns

Also growing steadily over the past three years is the investment of business angels in equity crowdfunding deals, reaching $35 million (€32.5 million) for 124 deals in 2021. The data were collected thanks to the support of the CrowdInvesting Observatory coordinated by Prof. Giancarlo Giudici (Politecnico di Milano), illustrating the number and amount of investments that business angels alone have made through crowdfunding platforms considering users who have invested at least $5,377 (€5,000) in one investment or a minimum of $1075 (€1,000) in three.

In 2019, business angel transactions through Crowdfunding amounted to a total of $1.4 million (€1.3 million) allocated through 27 transactions, while 2020 showed a very strong expansion with $28.5 million (€26.5 million) invested for a total of 101 transactions made.

The growth of women business angels and ESG

Also worth highlighting is the figure for women business angels, whose percentage after a few years is back up to 14 percent of the total, with more than one in three having made at least one investment in companies founded by other women.

What is new in Survey 2021 is the in-depth study carried out for the first time on the importance of ESG and impact investing aspects, verifying their relative importance in investment decisions: 65 percent of investors apply ESG and/or impact investing evaluation criteria when evaluating investment opportunities.

Investment sectors

The sector of greatest interest for business angels is confirmed to be ICT, on which they focus 36% of the investments made (a value almost́ unchanged from 30% in 2020 and 35% in 2019).

Within this group of operations, the high number of startups offering technology services aimed at businesses (Enterprise Technologies, 63% of ICT operations) persists compared to 2020, a change from previous years when the majority of investments in the sector concerned services aimed at individuals. This is followed by the Food sector (12 percent), with a strong Foodtech component, Healthcare (10 percent), confirming investors’ strong interest in the last three years in startups in the healthcare context, and Other Services (10 percent).

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(Featured image by Austin Distel via Unsplash)

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