The IAG Index Reveals that 37% of the Startups Analyzed are Sensitive to ESG

The Italian fintech sector has grown in the last 5 years. That is shown by the IAG Index, a thermometer of the startup ecosystem calculated on the database of startups analyzed in the selection of investment opportunities of the Italian network of business angels Italian Angels for Growth (IAG). For the analysis, 477 Italian startups were considered in the period July 2020-June 2021. Carlo Tassi, president of the business angel network, commented, “The IAG Index photographs the evolution of the ecosystem as seen through the eyes of IAG and also highlights the appeal of foreign projects of increasingly relevant size and quality.”

In the last 12 months, IAG has found a substantial increase in the presence of at least one woman in the team of fintech startups analyzed (equal to 10.2% of the total): more than one startup out of 3 respects this characteristic (35%, compared to 25% in 2020). Analyzing the stage of development of companies in which there is at least one woman in the founding team, in 2020 we can see that the majority of startups (1 startup out of 2) fell into the Proof of Concept (PoC) stage, while only 22.7% came to turnover. This figure changes significantly in the period June 2020-June 2021: in fact, many more startups with a female presence have reached product-market fit, in addition to an already substantial revenue presence (35%).

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The new parameter analyzed by the IAG Index is the ESG factor

37.4% of the startups analyzed by the network of Italian angels have a responsible business related to environmental, social, or governance impact in their companies. The fintech sector in recent years has dramatically increased its attention to ESG factors: to date, startups that incorporate these criteria have definitely increased.

Fintech ranks as the sector in which attention to ESG issues is growing more vertically, surpassing for example the digital sector (25% vs. 14%). The sample analyzed shows that the sector most attentive to ESG aspects is life science: more than 2 startups out of 3 have integrated sustainability criteria in their strategy to create value in the medium/long term. Life sciences also catalyze 40% of IAG’s business angel investments.

About rounds, business angels, especially those investing through club deals, focus on the seed stage (65.8% of funded capital raises), where their mentoring role is sometimes more valuable than the capital invested. In terms of valuations, the highest ones are in the fintech sector for pre-seed (3.5 million), seed (6.4 million), and Series A (19.2 million) rounds. Geographically, IAG business angels have invested mainly in Italy (58.5% of the rounds) and in particular in the north (42.5% of the total). Foreign valuations were confirmed to be more generous than Italian ones in the pre-seed and seed rounds, with a differential of even 40% in the case of the series A rounds.

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