Deeptech/Analysis/

11 Italian deeptech startups to watch, according to investors

The country has a great academic reputation, but is shaking off structural problems around creating strong R&D companies

By Tim Smith in Barcelona

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Caracol's 3D printing robots

Italy’s deeptech startups are succeeding in spite of the conditions they find themselves in, rather than because of them. The country’s annual spending on R&D is among the lowest in Europe, there’s a historic lack of engagement with university tech transfer offices, and in 2019 the education minister resigned over a lack of funding for universities.

All in all, it’s not a great environment for building research-based businesses right now. But with all that said, Italy’s tech ecosystem is starting to come of age. 

The country got its first billion-euro company this year in Milan-based BNPL Scalapay, and promising artificial intelligence startups like business forecasting tool Vedrai are starting to look like unicorns in waiting.

This growing entrepreneurial confidence, combined with a historically stellar reputation for academia, could be about to kickstart a renaissance in new, cutting-edge companies.

To find out who they might be, we asked some of the country’s top investors for their choices of Italy’s most promising deeptech startups.

Maria Cristina Odasso, head of business analysis — LiftT

LiftT is a Turin-based seed fund with close links to university research. The firm was born out of the Polytechnic University of Turin and has a long list of research centres and universities it counts as partners. LiftT has been backing early-stage Italian startups since 2019 and invests up to €300k initial cheques, with the ability to make follow-on investments in two subsequent rounds. The fund’s portfolio companies include laser hardware producer Zenit, cybersecurity platform Drivesec and spectrometer builder Specto Photonics. 

Maria Cristina Odasso, head of business analysis — LiftT

Ecoplasteam 

Founded in 2017, Ecoplasteam has developed an innovative solution for recyclable multilayer food packaging. Using a patented process, the company developed EcoAllene, an innovative material that’s 100% recyclable after consumption and sourced from waste coming from paper mills.

ROBOZE 

Roboze develops 3D-printing technology for high-performance “super polymers” and composite materials. It was founded in 2015 by Alessio Lorusso who was included in the Forbes’s 2018 30 Under 30 (industry) ranking. Now the company offers a complete range of advanced 3D printers for high-temperature and high-strength polymers. It recently closed a later-stage VC funding round that will accelerate its international scale up. 

Young Platform

Among Italy’s leading fintech scaleups, Young Platform aims to simplify access to the world of cryptocurrencies through a digital platform that incorporates educational information on blockchain technology and its applications.

One from the portfolio: Drivesec

Drivesec is a cybersecurity company that develops cybersecurity products for the internet of things (IoT). In an increasingly connected world, it aims to support companies by providing security solutions that comply with all the latest regulations in the IoT space.

Francesco De Michelis, CEO — Progress Tech Transfer Fund

Progress Tech Transfer Fund is headquartered in Luxembourg, but focuses its investments on “sustainable technologies from research done at Italian universities and public research organisations”. Founded in 2018, the firm has invested in deeptech companies including weather monitoring platform Waterview, Alzheimer’s diagnosis startup DeepTrace Technologies and satellite builder Picosats.

Francesco De Michelis, CEO — Progress Tech Transfer Fund

ThinkQuantum

ThinkQuantum offers complete solutions for cybersecurity and communication systems based on quantum technologies. It covers the complete value chain from design and manufacturing to commissioning quantum random number generator devices; quantum key distribution via fibres, free spaces or hybrid channels; and satellite quantum communications integrated with current telecommunication networks. 

Drivesec 

Drivesec has developed a cybersecurity system designed for IoT products. The company’s technology protects systems and data from external attacks, enabling clients to preserve and safeguard themselves from cyber threats in this growing technology space. 

Hiweiss 

Hiweiss creates proteins from plant-based sources, using sustainable agriculture techniques. The proteins can be used in applications like animal feed, the food and beverages industry and nutritional supplements.

One from the portfolio: Finapp

Finapp is a spinout from the University of Padua, founded in December 2018 by Luca Stevanato. The startup creates sensors that measure water content in soil, with the aim of promoting sustainable water usage. The startup has developed its own patented hardware system which uses something called “cosmic ray neutron sensing” to determine water levels in the ground.

Stefano Peroncini, CEO — Eureka! Fund

Eureka! styles itself as “Italy’s first independent deeptech investment fund” and has been operating from Milan since 2019. The main fund focuses on investing in early-stage university spinouts working in five core areas: energy, health and wellbeing, mobility, cleantech and AI. Portfolio companies include medical device developer Endostart, neuro implant startup WISE and printed electronics company Fleep Technologies. Eureka! also recently launched a new fund, focused on deeptech innovations in marketing and advertising.

Stefano Peroncini, CEO — Eureka! Fund

Newcleo 

Newcleo develops small nuclear reactors and recently raised the biggest ever VC round in Italy, landing €300m in June 2022, following on from a €100m round in 2021.

Genenta Science

Genenta Science is a biotech spinout from San Raffaele Hospital in Segrate working in gene therapies for cancer. The startup is listed on Nasdaq, having IPO’d in December 2021.

Leafspace 

Leafspace has developed a combined hardware and SaaS solution for running space missions, with clients all over the world. It raised a €10m Series A round last year and is now in talks about a possible US SPAC deal.

One from the portfolio: Caracol

Caracol is a robotics startup we backed in 2020 which builds large-scale manufacturing and 3D-printing robots. We are working on closing a new €10m Series A for the company, which we expect to come with a big increase in valuation.

Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith 

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