Content Benefit

Content Strategy | UX Writing | Content Design | Globalization | Communications

A leap from startup to scaleup

A leap from startup to scaleup

Why Italy produces plenty of startups and few scaleups

An article in La Repubblica about the leap from startup to scaleup brought back a story I’ve been following for a few years, about a company I came across near the start of its journey and that is now shifting shape. It’s not an isolated case. The numbers describe a country that’s good at launching innovative ventures but struggles to make them grow.

In 2025, equity investment in Italian startups reached 1.456 billion euros, a slight increase on the 1.416 billion of 2024 but still about a third below the 2022 peak, when it had come close to 2.16 billion (data from the Startup Hi-tech Observatory at Politecnico di Milano). The issue, though, isn’t only how much comes in at the start. It’s how many companies manage the next leap, the one that separates a startup from a genuine scaleup, with solid revenue and growth that sustains itself.

My own experience with an Italian startup

Years ago I got close to an Italian startup that grew enormously within a short time, reaching millions of users. I wrote about it here on the blog too, in a post recounting that first disappointment. The service that made it well known, though, never managed to generate solid margins on its own: revenue stayed thin against the volumes handled, and the accounts kept closing in the red for years. Today that company is diversifying, adding new revenue lines alongside the original service, precisely because that first model, on its own, hadn’t paid off.

I don’t know the inner details of their choices, but from the outside the pattern is clear: growing fast and winning users isn’t enough if the revenue structure behind the product can’t hold up over time. It’s a dynamic that affects several Italian startups that reached a meaningful scale without ever finding solid monetization, more so than the taxes or red tape people usually blame.

The gap isn’t only about available capital

According to an analysis published by Startupbusiness, willingness to pay is often assumed rather than measured, go-to-market strategies stay improvised, and early growth relies on personal networks instead of repeatable, tracked processes. On top of that comes weak governance, with founding teams strong on the product but thin on financial control. Capital, when it arrives, tends to amplify the waste rather than support a solid base.

That said, capital matters a great deal, and Italy lacks plenty of it in the stages that count most. The real European bottleneck is what’s known as the “late-stage funding gap”: seed rounds are easy enough to find, but once a company needs tens or hundreds of millions to grow properly, the mechanism breaks down. European venture funds hold an average of about 60 million dollars, against 120 million for their American counterparts.

What France does differently

The comparison with Paris is telling, even though the figures come from a Mind the Bridge report published a few years back and should be read as an order of magnitude rather than a snapshot of today. France was investing about 4 billion euros a year in late-stage funding and producing roughly 200 new scaleups annually, while Italy sat at 400 million and 30 scaleups, a bit more than a tenth on both counts. Behind that gap lies a deliberate policy choice: in January 2020 the French government launched the Tibi Initiative, securing commitments worth 6 billion from institutional investors, pension funds included, aimed at domestic venture capital. Italy introduced a similar mechanism only at the end of 2025, requiring pension funds to allocate 0.5% of their assets to venture capital, and it’s still being rolled out.

Then there’s the exit problem. When a European company grows for real, it often ends up acquired by an American giant and relocated abroad, taking along the skills and value built at home. It happened with DeepMind, Britain’s artificial intelligence jewel, now under Google. Europe, Italy included, keeps attracting international capital without managing to hold on to the companies it helps grow.

What actually needs to change

Putting the pieces together, the picture has more than one cause. More capital is needed at the later stages, with institutional investors ready to play their part instead of sitting on the sidelines. A more coherent regulatory framework is needed too: the long-awaited single startup law remains stuck, while the 30% tax break on private investment keeps living on uncertain extensions. And perhaps most of all, founders need a change of method: validating demand before building, testing price instead of guessing it, building repeatable sales processes instead of relying only on personal connections.

Running a business in Italy remains hard, I see that myself every day, on my own small scale. But the story of the startup I followed, now changing course, isn’t just about one founder’s limits. It describes an ecosystem that keeps producing good ideas without the conditions, capital and method together, to help them grow all the way through.

Related sources

Chiara Bonifazi