Silicon Valley Investors Discover an Inspiringly Robust Entrepreneurial Ecosystem in the Heart of Italy’s Emilia-Romagna Region

In search of the next big thing.

Over the last 20 years, entrepreneurship has gone increasingly global. According to the Global Startup Ecosystem Report, there are now more than 50 regions around the world with a startup network that has generated $4 billion or more in value. To put this in perspective, at the height of the dot-com bubble, there were four such regions.

Emilia-Romagna’s Ducati Museum

While Silicon Valley remains at the front of the pack, interesting innovation is happening all over the globe and connections to these ecosystems are increasingly important to various Bay Area-based startups, accelerators, investors, and corporate innovation teams.

Until recently, international entrepreneurs would largely travel to Silicon Valley to network, pursue investors, and learn from established players. But the traffic is starting to move in both directions, with investors flocking to emerging ecosystems like Italy’s Emilia-Romagna region in order to create ties with native startups, accelerators, and government officials.

“It’s too easy for Silicon Valley investors to develop tunnel vision and think that all the worthwhile innovation takes place in Silicon Valley and a few other hubs,” notes veteran Silicon Valley investor Bill Reichert, managing director of Garage Technology Ventures. “Visiting a variety of innovation ecosystems keeps me intellectually honest, as well as energizes me.”

To help generate that kind of energy, Silicon Valley-based U.S. Market Access (a global resource for entrepreneurs) recently arranged for Reichert and a group of other Bay Area investors to visit Emilia-Romagna to take a deep dive into all the region has to offer. The trip blended the heritage, cuisine, and culture of one of Italy’s most vibrant regions with a decidedly future-focused twist—think, automotive (Lamborghini, Ferrari, Ducati), manufacturing (Tetra Pac), and a thriving university hub.

“In Italy, we met with entrepreneurs who are tackling opportunities they see locally, but that have global potential—such as machine vision for manufacturing, or a novel approach to drug discovery, or better materials for additive manufacturing,” Reichert reflects. “When you stay in Silicon Valley, you can get into a rut of just talking with the same folks, frequently at a very superficial level. But when you take a week to visit another part of the world, meeting with entrepreneurs, visiting successful local companies, and sharing perspectives with colleagues from breakfast through dinner, you listen and learn and think differently, and you build some delightful new relationships.”

Above: In Bologna and Emilia-Romagna’s Autodromo Internazionale Enzo e Dino Ferrari

A key part of the Emilia-Romagna trip was seeing some the region’s companies in action. Tours of manufacturing plants including Tetrapac and Ducati among others showcased a high level of automation and technological sophistication. The startups on the itinerary were quite varied, as to be expected, but those that emphasized the region’s core areas of excellence stood out, including two healthcare startups and two dealing with advanced manufacturing via 3D printing (one of which had an automotive emphasis, another regional strength).

“The trip to Emilia-Romagna was a real eye-opener,” enthuses Ronald Weissman, member of the Board of Directors at Angel Capital Association. “When you combine a very motivated regional government, a strong on-the-ground team fostering entrepreneurship (with its own presence in Silicon Valley), and a well-executed regional plan to foster innovation, you have something very special.”

Fellow investor Shashi Kumar says the time is ripe for outside stakeholders to familiarize themselves with the region. “It definitely needs Silicon Valley investors to capitalize some great core technologies,” he says. “The startups presented to me had an excellent understanding of their pain-point solutions. The founders and team members each bring lots of research and experience behind that specific solution.”

Kumar continues, “I personally believe some of these startups are uncut diamonds with so much less valuation than their Silicon Valley counterparts. However, along with investing money, investment partners will have to strategically work with these startups [to develop] Silicon Valley-style go-to-market plans, growth partnerships, and business-use cases.”

Reichert concurs, stating, “I was blown away by what I learned in Emilio-Romagna. I knew that they had some of the great premium car companies, but I didn’t fully appreciate the scale of advanced technology, extensive supply chains, and depth of competence around global market penetration across multiple industries. I was consistently impressed by the depth of knowledge and technological sophistication of the entrepreneurs we met. What they lack, unfortunately, is a lot of entrepreneurial experience and an extensive support system that can facilitate customer acquisition, talent acquisition, and funding. The support system in the Bay Area is Silicon Valley’s unmatched ‘unfair’ advantage.”

The USMAC Silicon Valley investor group

Trip participants routinely expressed surprise at the density and diversity of the investment opportunities in Emilia-Romagna. While many eyes have already focused on Germany, the Netherlands, and various Nordic countries, Italy remains somewhat of a hidden gem, observes Mike Dovbish, executive director of Nutrition Capital Network, who has worked as a scout for global strategic investors in food, food tech, and nutrition for more than a decade. “This trip exposed the depth of the sectors I work in at both the corporate and startup level,” he shares. “It was impressive. As a whole, the companies and entrepreneurs that are driving innovation possess a passion for their work while providing thoughtful solutions to market opportunities with a global mindset.”

Those observations are music to the ears of people like Giovanni Anceschi, president of ART-ER, a consortium focused on fostering the Emilia-Romagna region’s sustainable growth by developing innovation, knowledge, attractiveness, and internationalization. He summarizes the four key messages he hopes investors took home with them after the recent trip. “First: People in the ER region want to contribute,” he states. “Second: Social impact and environmental impact are key to this strong entrepreneurial community. Third: The ER entrepreneurs have a big vision. If someone in the ER says they can do something, they already have tried and know they can. They are learning from Silicon Valley every day. Fourth: The ER is a great value for investors—the entrepreneurs really believe in what they are doing, but they need to get better at telling their story.”

“The region knows its strong suits and is capitalizing on them to move from strength to strength,” Weissman observes. “Dozens of affiliated research labs and institutes, all having a big-data emphasis, for example, and focusing on regional centers of excellence in areas such as healthcare and manufacturing, attest to what this combination of government funding and private initiative can accomplish.”

Following the investor group’s return to the Valley, Reichert has already followed up with two of the companies he encountered in Emilia-Romagna. “As with every company I meet,” he states, “there is still a long way to go between interest and funding. The reality for Silicon Valley investors is that we would really like international companies to open an office in Silicon Valley to take advantage of the resources here. We don’t want them to move the whole company, but Silicon Valley can often be the best place in the world to grow a company that has started elsewhere.”

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