STARTUP ACADEMY #3: FINANCING YOUR IDEAS
Wednesday 04 November 2020
The Startup Academy organised by UniCredit Start Lab continued its cycle of autumn lessons, with the focus shifting to the financing of innovative business ideas
The UniCredit Start Lab Startup Academy continued with two training days full of practical advice, enriched by direct testimonies from entrepreneurs, venture capitalists, business angels and other players specialised in the most important phase in the life of a new business: raising capital.
With Francesco Ortone, Co-Head Wealth Advisory Italy, Cordusio SIM, the competitive scenario for startups was analysed from a global trends in wealth management prospective and, therefore, of potential lenders. The predicted wealth transfer between generations around the world – about 30 billion euros that will move from boomers to X and millennials generations in the near future – will generate new values and motivations in the investment choices of capital created by family businesses. The trend, which is already clear now, reflects “passion-based investing”, with an increasing focus on sustainable businesses, philanthropy and technology. The growing role of women will not be a minor factor, considering they will hold 30% of the world’s wealth by 2023.
"Investing in the creativity of simple, young things is the best way to develop the economic capacity of a country like Italy. Investing in the production chain is the best way for an entrepreneur to generate returns seen as it would have an effect on the territory in which he/she works. In this perspective, wealth management plays an important role"
Francesco Ortone, Co-Head Wealth Advisory Italy, Cordusio SIM
Borsa Italiana’s Buyside Relationship Management team and Primary Markets team, together with Unicredit Start Lab, have therefore analysed current trends involving global institutional investors and those that can create funding opportunities for start-ups. In a context of very low interest rates, investors – family offices, pension funds, asset managers and hedge funds – are looking for higher returns, focusing on non-traditional asset classes. In Asia, the Middle East, and North America (as also happens in Norway and Singapore for government funds) large investment houses are building expertise and creating investment vehicles dedicated to innovative start-ups and scaleups.
Borsa Italiana has also developed market infrastructures for the listing of startups and alternative funds, with the aim of strengthening the dialogue between private and public markets.
One of the trends observed in Europe and Asia is also the creation of clusters in support of innovation, including Plug&Play, BayStartup and Levante, who also offered their interesting views on the matter.
Carsten Rudolph, Managing Director at BayStartUP and Andreas Wagner, Head of Division Promotional Loan & Startup and Succession Financing at UniCredit, leader in the startup and scaleup segment in Germany, illustrated the case of the innovation and investment ecosystem in Bavaria. In particular, Carsten Rudolph recalled how his company promotes startup competitions and incubation projects involving a network of around 300 business angels and 100 investors. Andreas Wagner, on the other hand, reiterated UniCredit’s supporting role in the German context, where attention is mounting on the development of the Internet of Things, Artificial Intelligence and Green Economy solutions, with tangible effects on the evolution of the Venture Capital investment phenomenon, which has tripled over the past 5 years.
With Andrea Zorzetto, Managing Partner at Plug & Play Italia, we focused on the key role that startups play in the digital transformation and the most effective ways to foster collaboration with large companies. Plug and Play is a player originally from Silicon Valley with offices in 30 cities in Europe, Asia and the United States, specialised in bringing together startups and corporations, projecting them on an international scenario. The company has been collaborating with UniCredit for years, and thanks to this partnership the first Plug and Play programme in Italy, based in Milan, was launched in 2019. The objective is twofold: both to help the network’s corporate clients have access to the best solutions at an international level, and to invest in the best Italian startups and help their foreign growth.
"We live in a 'startup economy' where startups become the ideal place to innovate - their agility in fact allows fast, iterative experimentation, close to the end user. The rules of the software world are now applied in every sector, even the most "hardware-intensive" ones. It is therefore also important for companies in the more traditional sectors to approach open innovation”
Andrea Zorzetto, Managing Partner at Plug & Play Italia
Francesco Rossi, Levante Capital’s Partner, widened the scenario to include the opportunities offered by the Asian continent, recalling how China is currently a market with great traction in Asia for all things innovative, with 181 unicorns, a number very close to that of the USA, and significant investments also in the American technology unicorns, where China is represented up to 25%. In this phase, Chinese interest in European technology is also growing.
"There are no other markets like Asia when it comes to customer driven technologies: it's not about standards, nor best practices. It's about making a product that works, that lets you say "it's the future!" but made with today's or even yesterday's technology, so that it can be adopted faster, manufactured at a lower cost, scaled enormously"
Francesco Rossi, Levante Capital's Partner
The testimony of Cristiano Spelta, CFO of e-Novia, a scale up operating in the Deep Technology sector, founded on the model of “Fabbrica di Imprese”, offered further concreteness to the theme. e-Novia is active in the areas of Collaborative Mobility, Augmented Human and Humanised Machines and has collected a total of almost 100 million euros in the last 5 years, together with the Factory’s Companies.
"The key ingredients of e-Novia's success are: the ability to demonstrate it can achieve concrete results and exceed its objectives, a transparent approach to governance since its very first day, a financial strategy based on sustainable business and responsible innovation, and the ongoing, active and transparent involvement of its investors"
Cristiano Spelta, CFO of e-Novia