Over the last year we have had the pleasure of working with Italy Cleantech Network to help catalyse more connectivity between innovation activities in Italy, and the international Cleantech innovation ecosystem – believing both stand to benefit. Into the 10th year of Cleantech Group being active in Europe and, to date, we had seen surprisingly little of Italy – given its status as the world’s 9th largest economy and one of Europe’s most diversified from an industrial activity viewpoint. We set out to change that through the co-hosting of an event in Rome and having Italian delegations visit recent Cleantech Forums.
The conclusion we have reached? There is much more going on within Italian Cleantech than we all know about. Here are some good reasons for you to find out more:
The Politics: The Italian Parliament is keen to help start-ups flourish and have passed a number of laws, including an Innovation bill in December 2012, to support start-ups, venture capital and crowd-funding. The country has also declared ambitious targets for the solar heating and cooling sector, and has established various subsidies, tax deduction incentive schemes and Conto Energia Termico (feed-in-tariffs) for the renewables space.
The New Ventures: In the fourth quarter of 2012, we had pointed out an interesting trend – the pop up of early stage Italian companies receiving a first round of equity investment, in total contrast to the rest of Cleantech (see our Quarterly Investment Monitor slides – Europe & Israel). Among the examples highlighted, were VASS Technologies, the manufacturer of the PuzzleRoof™, a ventilated roof composed by prefabricated modules, Eco4Cloud, the developer of energy efficient solutions for data centres and Grow the Planet, a designer of a web-based networking platform to enable agricultural producers to meet food needs. We will be watching this ‘counter-trend’ carefully to determine if it is an on-going trend.
The Local Investors: There have been various Italian investors who have participated in cleantech deals in their local market (where pre-existing activity was sparse or non-existent). The latest investment of Atlante Ventures, the venture unit of Italy’s largest investment bank, Intesa Sanpaolo, was made into Newlisi, the Italian developer of a patented chemical sludge reduction technology. Atlante joined existing investor 360° Capital Partners (who invest actively in Italy and France, with cleantech a partial focus). Last year, Ambienta, the Italian asset manager whose debut €217m fund invests in late-stage environmental businesses across Europe, took a majority stake in Tattile, the Italian developer of custom electronic systems for use in industrial automation, traffic management and railways. And Innogest, Principia SGR, and dPixel are example generalist Venture Capital firms that have recently committed some capital to cleantech companies.
The Foreign Interest: Evidence suggests that foreign investors are also increasingly interested in pioneering Italian companies, especially in the biomass and recycling sectors. Futuris, the producer of biomass plants, gained €4m this past March from Omnes Capital, the French PE spinout from Credit Agricole. EcoEridania, the provider of waste collection services, attained €14.3m from UK investor Xenon Private Equity. And one of the biggest deals in Europe last year came in for Beta Renewables, the developer of PROESA™ technologies for cellulosic biomass production, when Novozymes, the Danish developer of bio-innovative products, purchased a 10% stake for €90m. Beta Renewables was a JV set up in 2011 by the Chemtex engineering division of Gruppo Mossi & Ghisolfi and the capital might of TPG.
The Corporates: Italian companies are establishing a significant number of joint ventures with foreign peers and established players in the renewables space. Pirelli Environment Products and Services, the Italian provider of high quality fuel from municipal solid waste and Clean Diesel Technologies, a US developer of diesel emissions control systems are creating a joint venture – Eco Emission Enterprise – to market and sell emissions control products in Europe and CIS countries. Versalis (a subsidiary of Eni, the petrochemical giant) together with Novamont, the producer of innovative products from renewable raw agricultural materials, and Genomatica, the US developer of green chemicals, are partnering to enable production of butadiene from renewable feedstocks. Enel, the utility, has an active innovation program to work with start-ups, and names like Ansaldo Energia, part of the Finmeccanica Group, Indesit (who is part of the Energy@Home initiative) and Magneti Marelli, part of the FIAT Group, are illustrative of larger organizations keen on interacting more with external innovation.
Our overriding impression, after our first year of study? This is a country strong in early, R&D-stage innovation, but is weak in the local funding mechanisms to bring forward more growth companies. It has depth and is clearly globally-competitive, in particular cleantech-relevant areas like transportation, green chemistry and food/agriculture.
Go where the crowds are not, where potential exists but help is needed to pick some diamonds out of the rough? If I were an international investor and/or a technology scout, such conditions would certainly attract my attention.
Convinced yet that you need to explore Italian cleantech more? (Did I mention the history, the food, the wine, the beauty……?)