Recent data on the Italian venture capital market points to a trend we have been observing for some time: the ecosystem is evolving toward greater selectivity, without a corresponding contraction in deployed capital.
According to a recent report by Milano Finanza, the first quarter of 2026 saw a decline in the number of completed rounds, while total investment volumes remained broadly stable. At the same time, larger tickets are becoming increasingly relevant within overall capital allocation.
Quality Over Quantity
The reduction in deal count should not be interpreted as a slowdown of the ecosystem, but rather as a shift in investor behavior. Funds are becoming more disciplined, focusing on fewer opportunities with stronger fundamentals. This is consistent with a broader global trend: capital is still available, but it is concentrated on companies with clear execution capabilities and scalable business models.
In our view, this marks a structural maturation of the Italian VC market. The phase characterized by high deal velocity and exploratory investments is gradually giving way to a more selective approach, where conviction and underwriting depth play a central role.
The Rise of Larger Rounds
Another key takeaway is the increasing weight of larger rounds. As highlighted in the article, capital concentration is rising, with a growing share directed toward scale-ups and later-stage companies.
This dynamic has two important implications:
- Early-stage investors need to be even more selective at entry, as follow-on capital is increasingly competitive.
- Founders must demonstrate traction and operational excellence earlier in their lifecycle to access meaningful funding.
Implications for Early-Stage Strategy
For funds operating at Seed and Series A — like Lumen Ventures — this environment reinforces a few core principles:
- Founder quality is paramount: in a more selective market, execution capability becomes the primary differentiator.
- Ownership matters: with fewer but larger rounds, maintaining meaningful stakes at entry is critical to fund outcomes.
- Speed remains an edge: while diligence depth has increased, the ability to make fast, high-conviction decisions is still a competitive advantage.
A More Resilient Ecosystem
Overall, the data suggests not a contraction, but a rebalancing. Fewer rounds combined with stable investment volumes indicate a healthier allocation of capital, with less dispersion and more focus.
In the long term, this should contribute to building a stronger pipeline of companies capable of scaling internationally — a key requirement for the Italian ecosystem to fully realize its potential.
At Lumen Ventures, we see this phase as an opportunity. A more rational market environment aligns well with our strategy: backing high-quality founders early, with discipline on entry and a long-term perspective on value creation.