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Introduction to Milan’s startup ecosystem
Milan is the heart of the startup scene in Italy. The city is the center of the Italian economy: many companies and multinationals have branches here, the Stock Exchange is here, main Italian media are here, investors are here. Historically, Milan is the economic engine of the country. Even if the city is internationally known mostly for food, fashion, design, it is also developing as a center of innovation. In StartupBlink’s 2019 report, Milan is ranked 1st in Italy and 57th globally.
Biggest successes of the Milan startup ecosystem
Wise is a biotech company that is developing a system to cure the problems linked to the nervous system. Its technology is so innovative that they have many investors including some from Germany and Switzerland.
Mailup is a listed company at Milan Stock Exchange that offers technologies and services to better communicate via web and e-mail. It is based near Milan but it operates worldwide, mostly in non-English speaking countries. It also acquired several companies around Europe to accelerate its expansion.
Moneyfarm developed a robo-advisor system that allows everyone to invest their money in a clever way. The company is now expanding its business in London, the worldwide fintech capital.
Satispay is taking a big challenge: developing a new payment circuit that does not require credit cards or other forms of payment but only an app on a smartphone. After a few years of work behind the scenes, the company is now testing its system around Italy.
D-Orbit is a space technology startup that is working on a system that allows recovering satellites at the end of their operating life. The system is already in the testing process and a first full operative launch is on schedule for next year, all satellite makers and space agencies around the world are already showing big interest around this innovation.
X-Metrix is a sports wearable company that developed the first device to track the performance of swimmers. The company already received some important awards including the prestigious Premio Gaetano Marzotto and now is planning its international expansion starting from the US market.
Advantages of starting in Milan
Exposure and development of startups: In Italy today, startups are created everywhere, even in the small villages far from the big cities, but when its time to grow up a bit, to find media coverage, to find investors, to find potential industrial partners, that is the time to move to Milan.
The city hosts many startups that are keeping their R&D in the original cities where they were born, but move the management to Milan in order to be in the center of the scene, of course there are also many startups that every year are founded in Milan and this mix is further helping the ecosystem to grow up and be very active. Despite, according to Startup Heatmap, about 30% of Italian startups are moving abroad every year, there also some non-Italian entrepreneurs choosing Milan to develop their venture.
Vibrant startup ecosystem: The ecosystem in the city is very vibrant, events are countless, if you check out the Italian StartupDigest you’ll find out that most events are in Milan then in other Italian cities, all major business angels, venture capital funds, and investors club deals are based in the city of La Scala Theatre, biggest co-working spaces, incubators, and office building hosting innovative companies are in the city (even some good are based in other city such as for Luiss Enlabs in Rome).
Copernico that is a 15,000 square meters building next to the Central railway station that hosts hundreds of innovative companies of any size, a co-working space calle StartMiUp, and events almost every day. Other hot spots are, just to name few, the Bocconi University with its own incubator, the Politecnico di Milano with its own incubator called Polihub, Base Milano, a space for events and coworking recently opened within an old factory building, FabriQ hosted by Milan City Council in the city uptown to host social impact startups.
Skilled entrepreneurs: Italian startuppers are among the more creative, committed and skilled in the world and this is a fact that appears very clearly when they move abroad or take part in international business plan competitions.
Infrastructure and cost of living: Living in the city is quite easy because the life cost is not too high considering is one of the most important European cities, the infrastructures are well organized: Milan has three airports (Linate, Malpensa, Orio al Serio), it is connected with all other major Italian cities with bullet trains (Turin, Venice, Bologna, Florence, Rome, Naples), and is just 55 km far from Switzerland (the Swiss city of Chiasso is part of the Greater Milan public transportation network).
Active bitcoin community: Milan is also home to one of the most active communities for blockchain and bitcoin worldwide. It hosts the BlockchainLab organization that also helps startups in this field such as GreenAddress that was recently acquired by a US company, and it will organize the third edition of Scaling Bitcoin, the top event for the worldwide bitcoin community, that after Montreal and Hong Kong is coming to Milan next October.
Disadvantages of starting in Milan
If Milan is the hot spot for startups in Italy, there is a lot yet to accomplish to put it in the European and international network of startup cities. Eu Startups says that Milan is the tenth European startup city of importance but there are still problems afflicting this ecosystem, with the major ones being the following:
Government policy: On 2012, the national government approved a specific startup bill that is applying some specific fiscal advantages to startups and to investors but after four years, it has not delivered the results expected and the main problem is because the bill includes a decree definition of ‘innovative startup’ that is not the one the market likes. So in effect, the bill is acting as a sort of cage and the advantages it offers are not the ones investors are looking for. This brought the Italian ecosystem to an actual zero growth in terms of the capital invested in startups during the recent years.
No incentives for investment: On 2015, according to both to the Italian venture capital association (Aifi) and to the Osservatori of Milan Polytechnic, in Italy have invested only about 120 million euros on early-stage startups. This means that in Italy is invested ten time less money than in Germany, Uk or France and even less than Spain, Portugal, and even Slovenia. Plus the legislative and tax systems in Italy are still too much bureaucratic and this is keeping international investors far from investing in Italian based startups, that’s why many cool startups tend to move abroad.
Of course, there are some exception to this last rule, some Milan based startups are already on the international scene (For example, Wise Technology is invested by a German-based fund among others, Restopolis was acquired by Tripadvisor and now is one of the biggest business in the restaurant booking international scenario, MailUp is a listed former startup that is operating worldwide and even acquired some international companies, Cibando was acquired by the Indian group of Zomato, MoneyFarm that was invested also by a Uk based fund and recently opened its’ branch in London, Docebo that received an investment by a Canadian fund, Dhh that bought companies in Slovenia, and Croatia.)
Biggest Players in the Milan Startup Ecosystem
Startup investors in Milan
All major Italian investors are based in Milan, among them, there are:
Vertis (www.vertis.it) Is a VC fund that invests mostly in non-pure-digital startups focusing on energy, medical devices, Industry 4.0. It will launch a new fund in the next weeks.
Panakes Partners (www.panakes.it) Is a VC fund focused on biotechnologies, medtech, and life science innovation. It invests in Europe and Israel.
Redseed ventures (www.redseed.it) is a seed early-stage investors focusing mostly on digital startups.
IAG stands for Italian angels for growth (www.italianangels.net) and is the main business angels group in Italy, it invests in different fields because it can leverage on knowledge and expertise of the more than 100 members.
SiamoSoci (www.siamosoci.com) is an online and offline platform that allows professional investors to meet interesting startups and invest in them under a co-investing scheme. It also manages investors clubs dedicated to specific sectors or areas.
United Ventures (https://unitedventures.it/) is a VC fund that invests mostly in pure digital startups able to ‘reshape industries through technologies’ as they state on their homepage. United Ventures operates in collaboration with some incubators such as The NetValue based in Cagliari.
Withfounders (https://www.withfounders.it/) is a group of entrepreneurs and former entrepreneurs that created successful companies and now are investing in other entrepreneurial ideas and projects based on innovation and technology. They call themselves the Italian seed accelerator.
Innogest Capital (https://www.innogest.it) is one of the main Italian VC funds, it has invested 60million euros in 32 startups so far and it has a 170 million Euro fund under management. It operates from its offices in Milan and Turin.
Incubators and accelerators in Milan
Polihub, aka Startup District (https://www.polihub.it/) is the startup incubator of the Politecnico di Milano, the most important technical university in Italy. Polihub is the right mix between startups, corporation and academic resources.
BlockchainLab (https://www.blockchainlab.it/) is focused on blockchain technology. It is a think tank, an event organizer and an incubator for startups. It is based inside Copernico.
SpeedMiUp (https://www.speedmiup.it/) is the co-working and incubator of Bocconi University, one of the best-known business universities in the world. The incubator is backed also by the Milano’s Chamber of Commerce and the city council.
Digital Magics (https://www.digitalmagics.com/) calls itself the Italian business incubator. It is a listed company at the Milan Stock Exchange and it invests in digital startups, as well as manages two co-working spaces in the city.
Coworking Spaces in Milan
StartMiUp, the Milano’s talent hub (https://www.startmiup.it/) is a co-working space and event location. It is located within Copernico so startups and freelancers can easily access to a great community of companies and potential partners both financial and industrial.
Impact Hub Milano (https://milan.impacthub.net/) is part of the international network of Impact Hub places around the world and this is a value for startups looking for international connections. It is also an event space and organizer.
Avanzi (https://www.avanzi.org/) is a co-working and event space specifically focused on innovation with high impact on social aspects and with high sustainability. Avanzi is also an incubator for impact startups.
Base Milano (https://base.milano.it/) is a recently opened space hosted in a former old factory building that offers spaces with the co-working formula and spaces for events, even for ones with many guests because space is quite huge and very well restored.
Startup Events in Milan
ScaleIt (https://scaleit.biz/) is the ‘top Italian scaleups showcase for international investors’, is the only event where selected Italian scaleups meet international investors and it happens in Milan for its second edition next October 12.
Digital360 Group (https://www.digital360.it/) is a publisher of magazines off and online dedicated to technology innovation, is an events organizer, it has its own incubator for startups and a consulting division to help startups to work with corporation fostering the open innovation strategy (Startupbusiness – www.startupbusiness.it – funded and directed by the author of this article is part of Digital360).
Assolombarda is the association of entrepreneurs of Milan and is part of the national association Confindustria. Assolombarda launched a program called Startup Town (https://www.assolombarda.it/news/assolombarda-presenta-il-progetto-startup-town) to help startups based in Milan’s area to grow up fast, to access to a series of services and to meet potential industrial partners.
Initiatives supporting Milan’s startup ecosystem
- The city hosted the Global entrepreneurship congress in 2015 and is home of the first and only event that brings together top Italian base scale-ups and international investors, the event is called ScaleIT and this year it will have its second edition on October 12th.
- City Council signed an agreement with the city of New York in order to help startups of both cities to develop their business in Milan and New York, the Chamber of Commerce launched an initiative last year to support innovative companies and facilitate the participation of startups at the World Expo and because the program was successful it continued this year even if the Expo is over.
- The Milan’s Polytechnic, other than supporting the entrepreneurship education, developed a specific observatory to monitoring the Italian and Milanese startup ecosystems.
- Startup business is an information repository for innovative entrepreneurs and a community for the Italian startup ecosystems and is part of the Digital360 Group that publishes other magazines, organizes events and other activities to help companies to become more innovative.
- There are many other smaller co-working spaces and initiatives and even trade shows like the startup Expo that after three years as the physical event now is becoming the first virtual reality trade show fully dedicated to startups from all over the world and is now called GlobalStartupExpo. It is powered by the technology of a Milanese startup called Hyperfair, that now operates from Silicon Valley.
Conclusion
The Milan startup ecosystem abounds in opportunities for entrepreneurs looking to scale, as it has the necessary economic and technological infrastructure. What this ecosystem currently needs is a better framework to encourage big-name investors in backing its startups.
About the author:
Emil Abirascid (www.abirascid.com), the journalist writes on innovation that becomes a new enterprise. He is the founder of Startupbusiness, the network where startups, investors, enterprises, universities, incubators, and scientific parks can change experiences, resources, projects and do business together. He curated the book ‘L’innovazione che non ti aspetti. Contesti e visioni per l’impresa’ published by FrancoAngeli. He writes about innovation and innovative startups on Il Sole 24 Ore, the main Italian financial newspaper. He is also the curator of StartupDigest Italy and advisor of International Accelerator. Emil also participates on a regular basis at events, conferences, conventions about innovation nationwide. In the past he was the chief editor of Innov’azione, bi-monthly magazine fully dedicated to the Italian innovation ecosystem, published by Apsti, contributor at Corriere Innovazione and organized of the startup area within the main Italian Information technology trade show Smau.
