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Venture Capital for Italy
 

Venture Capital for Italy

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Venture capital and the opportunities in the Italian digital economy. A presentation from Annapurna Ventures.

Venture capital and the opportunities in the Italian digital economy. A presentation from Annapurna Ventures.

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    Venture Capital for Italy Venture Capital for Italy Presentation Transcript

    • Annapurna I early stage venture fund September 2011 Venture Capital for Italy -
    • A new balance of power
      • Apple in July 2011 had more cash than US Government
      73,8 Billion $ 76,2 Billion $
    • Digital innovation is part of our daily life
    • Great companies are backed by great investors
    • Why VC is important?
      • Impact on economic growth;
      • Increased profitability of backed companies;
      • Employment growth;
      • Support to innovation processes;
      • Increased skill premium.
    • The economic impact of venture capital
      • In the US, from 1970 to 2008, each dollar invested in venture capital created 6.36$ of revenue*;
      • Venture backed companies generated 21% of US GDP and contributed to 11% of the total employment in the private sector*;
      • Top 1% high growth companies created 40% of the new jobs in the American economy**.
        • *A.A.V.V., Venture Impact: The Economic Importance of Venture Capital-Backed Companies to the U.S. Economy, National Venture Capital Association - IHS Global Insight, 2009)
        • **Stangler Dane, High Growth Firms and the Future of American Economy, Kauffman Foundation Research Series, Firm Formation and Economic Growth, 2010.
    • VC impact in Europe
      • Approximately 5-6 billion Euros invested in VC each year;
      • More than 1 million people employed in VC backed companies;
      • Compounded growth of employment, from 1997 to 2004, in European VC-backed companies reached 2.4%, compared to 0.7% in other companies.
        • Source: Employment contribution of Private Equity and Venture Capital and Europe, EVCA Research Paper, November 2005. AA.VV., Survey of the Economic and Social Impact of Venture Capital in Europe, EVCA Research Paper, June 2002.
    • A recent trend: Founder ’ s funds / Seed funds worldwide Former entrepreneurs are backing new entrepreneurs with funding & mentorship Company / Fund Founders Area Year Size Andreessen-Horowitz Marc Andreessen (Netscape, Ning) USA 2009 $300 M Atomico Ventures II Zennstrom-Friis (Skype) UK 2010 $165 M Innovation Works Kai-Fu Lee (Google China) China 2009 $115 M Felicis Ventures Aydin Senkut (Google Inc.) USA 2010 $40 M Founders Collective Eric Paley (Brontes Technologies) USA 2009 $40 M ISAI Pierre Kosciusko-Morizet (PriceMinister.com) France 2010 $32 M PROfounders Capital Michael Birch (Bebo) UK 2009 $30 M
    • Digital innovation impacts the whole economic system
      • The digital economy impacts all industries introducing open innovation models. Low set up costs for internet companies are generating a massive innovation opportunity outside already established businesses;
      • Example: Google acquired Android in 2005, providing the ground for a future market leadership in mobile software and operating systems, and acquired other 74 companies, 25 during the last year (sep-09 -> sep. 10 *);
      • Low cost distribution platforms are providing fast and global spreading channels: search engines (Google, Baidu, Bing), social networks (Facebook users > 500 Million in 2010 **), devices (iPads, smartphones. European Smartphone Market +41% in July 2010, yearly increase ***)
      * http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google ** http://www.facebook.com/press/info.php?statistics *** http://comscore.com/Press_Events/Press_Releases/2010/9/European_Smartphone_Market_Grows_41_Percent_in_Past_Year
    • The Italian net economy
      • The Italian net economy is now worth 31.6 billion Euros;
      • In 2015 economic impact of the Internet will be 3.3 to 4.3% of the Italian GDP;
      • The smart application of on-line resource increased productivity 10% in the service industries and 5% in the manufacturing industries.
      • Source: Boston Conslting Group (“ Fattore Internet ” , 2010)
    • The dynamics of Italian digital economy
      • 2010
      • + 16% on-line users;
      • + 15% online advertising;
      • + 14% ecommerce;
      • + 11% registered domains;
      • Contribution to 2% of the GDP.
    • Some examples of Italy ’ s successful digital entrepreneurship history Core business: Exit date: Exit strategy: Valuation at exit: Current mkt cap: Online broking of financial services May 2007 IPO (Italian Stock Exchange, STAR segment) ~170 M€ ~220 M€ (sep 2010) Online travel aggregation (hotels) September 2008 Acquired by Expedia (multiproduct online travel aggregator) Estimated >500 M€ N/A E-commerce (multibrand apparel) November 2009 IPO (Italian Stock Exchange, STAR segment) ~220 M€ ~360 M€ (sep 2010) Mobile & web media and advertising July 2000 IPO (Italian Stock Exchange) ~120 M€ ~80 M€ (sep 2010)
    • There is a big technological opportunity in Italy Italy is as innovative as the United Kingdom and three times more than Spain Italian EPO patent ratio versus million inhabitants for high tech technologies is just 2.8% less than in UK but is three times higher than in Spain. (Our analysis based on Eurostat database - 2010)
    • ICT is the most common technology of Italian spin offs The number of Italian university spin off companies is growing steadily Scientific entrepreneurship is becoming a common habit among universities. Spin off companies are one of the most common targets for venture investments (Our analysis based on Netval Report - 2010) CAGR 18%
    • ICT is the most common technology of Italian spin offs Annapurna will select among the most common technology used by Italian high tech entrepreneurs. (Our analysis based on Netval Report - 2010)
    • Lack of international capital - 1 770M Eu Funds at first closing with European focus None of the funds operating in Europe currently in first closing is focused in Italy. Furthermore funds with large geographical coverage (63% of total capitals) doenot perform seed or first rounds and does not provide hands on entreprenurial coaching. Source: our analysis based on PreQuin database 2010 – early stage funds focused on Annapurna ’ s technological areas
    • Lack of international capital - 2 800M Eu Funds raising with European focus None of the funds operating in Europe currently raising capitals is focused in Italy. No funds are raised in Southern Europe and big funds with continental or intercontinental coverage represent 62% of capital raised. Source: our analysis based on PreQuin database 2010 – early stage funds focused on Annapurna ’ s technological areas
    • Opportunity Annapurna is the only new player to operate in a high intensity deal flow country like Italy and will leverage on co-investments with Pan-European funds for second rounds
    • Venture capital in Italy: the gap and opportunity
      • The single average investment and the whole national investment level are smaller than the corresponding European averages.
      • There is a gap in the “early stage” phase of the investment cycle.
      • There are several available resources for small and medium enterprises but not to startups or in areas with high growth potential
    • Annapurna: investing in the Italian digital ecosystem
      • Annapurna
      • The mission of Annapurna Ventures is to identify and support innovations in the digital ecosystem , creating great companies with a proactive investment process. 
      • Annapurna was founded by former entrepreneurs (Google Italy, Tiscali, The NetValue) and has the skills to ride the new trends in digital innovation. It operates as management company, selecting new ventures and tutoring them for business development.
      • The fund is legally established by Fondamenta Sgr, an organization that successfully launched the first and biggest venture capital fund focused on technology transfer.
      • Investment targets:
      • Consumer internet
        • Vertical search platforms, Digital Media, Social Media
      • Enterprise software and services
        • Social Marketing Platforms, E-commerce platforms, Digital Advertising
      • Mobile
        • Apps, Mobile advertising
    • Annapurna: track record A multiplatform publishing and advertising solution for newspapers, magazines, catalogues and newsletter . O n-line credit broking platform based on comparative search tools. Self-service mobile app development solution for the consumer market. Recommender system for the media  &  entertainment market. On line wealth management solution for the consumer market. +Plugg empowers objects with intelligence and interaction with smartphones.
    • Paperlit
    • Money360.it
    • AppsBuilder
    • Annapurna I team combines strong industrial and financial experience Massimiliano Magrini Founder, Managing Partner Founded Google Italy and Altavista Italy. 20 years of experience in Business Development and General Managment in Media and Technology companies. Mario Mariani Senior Partner Co-founded and managed Tiscali, funded incubator TheNetValue. 15 years of experience in project development and general management for the ICT sector. Raffaele Mauro, Ph.D. Associate 5 years of experience at Bocconi University and various internet start ups, developing projects related to finance, digital innovation and entrepreneurship. Alessandro Perrone Analyst BSc in Economics at Bocconi University. Member of the board of advisors at SEP - Il Secolo XIX; analyst in 2008 in the brokerage department of Cushman & Wakefield.  ANNAPURNA VENTURES
    • Contacts Massimiliano Magrini [email_address] M: +39 335 779 3385 T: +39 02 4966 1426 Blog: ipdixit.com
    • News & Press
      • 25/05/2010 – Il Sole 24 Ore
      • “ Annapurna Ventures debutta nell’editoria digitale – Il venture capital entra in Paperlit, uno degli operatori che porta i giornali sull’I-Pad”
      • 09/09/2009 – Prima Comunicazione
      • “ La scalata di Magrini: Si chiama Annapurna Ventures la nuova società di Massimiliano Magrini, fino allo scorso luglio country manager di Google Italia”
      • 12/06/2009 – The Startup.eu
      • “ Google Italy Country Manager resignes, will bring Silicon Valley to Europe”
      • 12/06/2009 – TechCrunch
      • “ VC launches in Italy – this just doesn ’ t happen. What is going on ? ”
    • News & Press 16/06/2010-Il Sole 24 Ore – CentroNord “ In appena due anni di vita ha già effettuato dieci investimenti, dall'agricoltura alle nanotecnologie, dalle scienze della vita all'elettronica, puntando su giovani imprese e Pmi consolidate ma innovative. Si tratta di TTVenture ” 09/03/2009 - Affari Finanza “ Ogni progetto viene analizzato sia sotto il profilo scientifico che quello imprenditoriale, grazie ad una squadra di analisti provenienti dal mondo della ricerca industriale ed accademica che si affiancano ai tradizionali analisti finanziari tipici dei fondi chiusi” 17/03/2008 - Affari e Finanza “ Si chiama TTVenture ed è il fondo chiuso di venture capital (ma gli investimenti previsti non riguardano solo le start-up) il cui scopo è semplice: favorire il trasferimento tecnologico alle imprese dei risultati dell’innovazione”