Lately, I’ve had this contrarian thought that keeps coming back. It doesn’t really fit the usual optimistic story Italian VCs tell themselves. I’m not claiming much, just wondering: is there still room to play at seed in Italy, or are the most competitive rounds slowly slipping out of reach?
There’s a bit of tension in the Italian VC scene that you don’t really hear about in panels or LinkedIn posts. It’s not about the capital, there’s plenty of that. And it’s not about the founders. The real question, which few talk about, is whether Italian funds still have room to play at seed and beyond, or if that window is quietly starting to shut.
At first glance, pre-seed looks healthy in Italy. It’s a good playground for local investors. The rounds are familiar, international competition is limited, and being nearby matters. Founders raising their first institutional capital are still rooted in local networks, and they care more about speed and trust than big names. Italian VCs have a clear edge here: they know the context, and rarely compete with foreign funds for these smaller rounds.
Super high-quality pre-seed deals in Italy are still more visible, though still not abundant, and when they do appear, they quickly become highly competitive, often driven by market FOMO. For credible local funds, winning these deals is possible, but it can create a false sense of strength. You could even say that getting into the very best early-stage opportunities in Italy can be easier than in more mature ecosystems. It’s not a critique, just the reality of a market that’s still developing.
At seed, things change because startups start telling more serious stories, increase traction, and above all, look outside Italy. That's when bigger rounds roll in, more eyes on you, networks stretching beyond the neighborhood.
No surprise, this is where foreign funds pop up, don’t always show up loudly or in big numbers. They bring bigger checks, well-known names, and experience helping companies grow through multiple stages. For a founder who is suddenly playing a larger game, the trade-off becomes clearer: raise €2–3 million locally, or €5–8 million with a fund that can also lead your Series A and open doors in London, Paris, Berlin, or the US. I’m thinking of names like (click for the news) JetHR, Sibill, Lexroom, Volta, Qomodo, Subbyx, Sizeable, Ephos and many others announced or still in stealth.
A clear pattern is emerging, even if few admit it. The best Italian startups, those with real outlier potential, often move beyond the local funding scene once they reach seed. They don’t fully move away from it, but as they grow, they tend to look beyond the local market, exploring a broader, more competitive fundraising landscape.
Local funds are good at spotting early potential. They give founders a first push, help them get started, and take some of the risk off their shoulders. But as these opportunities grow, and capital needs increase, the focus naturally starts to expand beyond the local ecosystem. When it comes to scaling that opportunity, when the capital requirements increase and the competitive landscape broadens, the center of gravity shifts elsewhere.
You could see this as part of how things evolve. Ecosystems take time, and it makes sense that international capital gets involved as startups grow. The question remains: is this a temporary phase, or is it becoming a structural feature of the Italian market? Because if it’s the latter, then the role of seed (and later stages) in Italy starts to look less like an opportunity and more like a transition point, one where local funds participate, but rarely lead in a decisive way.
Some Italian funds are actively trying to reposition themselves, raising larger vehicles, building international networks, and competing more aggressively for seed rounds. A few are succeeding. But the broader trend suggests that scale still matters, and scale is precisely where many domestic players are constrained by fund size, by risk appetite, and sometimes by an implicit bias toward staying within familiar territory.
Meanwhile, founders are becoming more sophisticated. They are increasingly aware that capital is not just about money, but about trajectory. The choice of investor at seed is seen less as a financing decision and more as a strategic alignment. Who can help me raise the next round? Who understands my market beyond Italy? Who has seen this movie before?
None of this means that there is no space left for seed in Italy. But it does suggest that the nature of that space is changing. It’s no longer enough to simply “be there” when companies reach that stage. Competing at seed increasingly requires a level of ambition, connectivity, and firepower that goes beyond what has traditionally defined the Italian VC landscape.
In other words, the bar is moving. And I’m sure that if you’re a fund manager, you don't wanna look like the guy left behind.
Honestly, if Italian funds don’t step up, seed might just become a warm-up rather than the main event. Top startups are looking beyond Italy, and local investors need ambition, resources, and connections. That’s exactly why, together with IAG, we launched Eden Ventures to back the best 0,1% of Italian founders at the pre-seed stage and act as a catalyst for a new generation of investors ready to compete on the European stage. The choice is simple: watch the best leave, or fight to stay in the game when it counts.
Riccardo Vanelli, IAG Investment Manager