Italy is just about as well known for its bureaucracy as it is for its burrata. It is fair to say the latter is more popular with Italians than the former. Mind-numbing bureaucracy is the reason many Italians say they will not found a startup in their home country, and it impacts just about any administrative task that they come across in everyday life.
One such task is accessing welfare benefits. As well as the complex legal language and demands for documents, in-person visits to public offices and expensive private consultants are often necessary to navigate the application process.
All of which are, of course, unavailable to the people who need them most.
Milan-HQ-d BonusX says it’s building the tech to make this process easier and cheaper. It just raised a €3.2m seed round led by London’s Giant Ventures, and joined by Exor Ventures, 2100 VC and angels including Raffaele Terrone, cofounder of Italy’s first unicorn, Scalapay.
Reducing “non-take up”
BonusX’s cofounders Giovanni Pizza and Fabrizio Pinci both hail from Naples, which has one of the highest youth unemployment rates in the EU.
“Growing up, we saw a lot of inefficiencies in public administration, where people either did not have the knowledge to understand public documents, or they did but were discouraged by the complex and expensive process,” Pizza tells Sifted.
“What this did was it discouraged people from making a very tangible improvement to their lives,” he says.
Called “non-take-up”, the phenomenon is not unique to Italy. Pizza and Pinci say the problem is prevalent in the US, where they intend to scale their product soon.
The Italian market is their testing ground for the tech, they say, because of the complexities of its local bureaucracy and low digital literacy.
They say existing players, like Berlin HQ-d Taxfix, have struggled to gain traction in Italy due to the complex local requirements that mean their product isn’t easily transferred.
How does BonusX work?
Users login and create a profile on BonusX with their key family and financial information, and the platform gives them instant information about all the services and benefits they’re eligible for.
This stage is free for users, but when they want to apply for the relevant benefits, they can do so directly through the BonusX platform, which links them up with the various different providers they need — including welfare agencies, tax agencies and local governments.
BonusX’s business model relies on transaction-based fees at this point, which depend on the application in question. Its cofounders say the fixed fee averages at around €10 but can range from €160 to free.
The startup says it’s amassed 350,000 users since it launched in January 2022, and users have accessed €25m in public benefits through its platform so far.
BonusX will use the money to grow its team of 14 and build out its product.
While its cofounders don’t specify which geography they want to expand into first, they say that Spain is the most similar to Italy in how its public benefits system works.
But they say the biggest market opportunity is in the US — where “billions” of government budget doesn’t get spent due to non-take-up.
BonusX wants to use the same quantitative data provided by users to help them with their tax declarations, as well as other aspects of financial administration — including mortgage applications.
“We want to bring a more holistic approach to maximise the use out of the data and move away from the problematic siloed approach we’ve seen in the past,” Pizza says.
