Italian sector firms can attract capitals and generate innovation, but it’s necessary a new approach to risk, said the panellists of 26 June, Thursday, BeBeez Cafè
That biotech is one of the most promising sectors for venture capital is no longer in question(see here the Bebeez Report of 26 June, Thursday). But whether Italy is truly ready to seize the opportunities it offers is a question that continues to divide investors, scientists, and policymakers. Italy is in fact a high-potential area for investment in biotech, especially in the early stages, thanks to excellent R&D teams with competitive labour costs. However, the leap from academic research to business remains hampered by a culture that is still risk-averse and by slow and fragmented financing mechanisms. This is what emerged on June 26 from the Caffè di BeBeez Web roundtable on Investments in Biotech: Opportunities on the Italian Market. The Lighthouse Biotech Case (watch the video here), hosted by italy’s venture capital investor Utopia SIS.
Hence the growing importance of players specialising in venture capital such as Utopia SIS, represented at the round table by ceo and co-founder Antonio Falcone; of courageous start-ups such as Lighthouse Biotech, represented by co-founder Fabio Del Ben; and virtuous collaboration with public research, as evidenced by the experience of the Udine University Hospital, represented at the Caffè by Michela Bulfoni, biologist and researcher at the Institute of Clinical Pathology at the Udine University Hospital, and professor of molecular biology and molecular diagnostics. An ecosystem that, if systematized, can also attract international capital.
The Italian ecosystem has the potential for attracting foreign investments.
Utopia SIS was among the first Italian operators to believe in this potential development. Mr. Falcone, who founded Utopia SIS in 2020 with the support of Fondazione Golinelli and Fondazione di Sardegna, said: ‘We want to intervene in the most difficult part of the sector, the so-called valley of death. That is where capital, vision and trust are nedeed. We appraise the quality of science and human resources. We look for those who want to build a business, not just publish academic papers”. The SIS model has allowed Utopia to operate more flexibly than a traditional fund. “Unlike ordinary venture funds, we don’t have time constraints. This allows us to follow start-ups for longer, supporting them with resources but also with expertise, networking and advisory. In the current context, the investor often must do business together with the team, filling managerial gaps and helping to design market strategies”, Mr. Falcone added.
Click above to review the BeBeez Web Café of June 26
on Investments in biotech: what opportunities are there on the Italian market? The case of Lighthouse Biotech
The case of Lighthouse Biotech, shows that it is possible to build biomedical deep tech with a real impact in Italy. The company was actually founded in 2019 out of a laboratory intuition, i.e. finding a non-invasive, effective and repeatable method to monitor tumour evolution in patients, which then turned into a credible business project. The firm’s case shows that it is possible to build biomedical deep tech in Italy with a real impact, but it also highlights how difficult is to attract the necessary capital. Fabio Del Ben, the startup’s co-founder and ceo, said that he and his team struggled for fundraising. However, at the end of 2021 Lighthouse secured a 1.1 million euros seed round from lead investor Utopia SIS and the deep tech syndicate Pariter Partners. The startup also received grant for a total of 1.3 million (0.95 million at the end of 2024) while it is currently carrying on an equity crowdfunding camapaign on CrowdFundMe that already attracted a 0.2 million euros convertible loan from Utopia SIS. Del Ben added: “Today we are close to a turning point. Our scenario envisages a potential exit in 2027, but we will be ready”.
Mr. Falcone added: “We believe in the technology so much that we wanted to follow the company into the next round as well, and that is the logic of the venture: to accompany, not just finance”. Del Ben pointed out: “We aim to achieve initial market validation, starting in the field of oncology research and then aspiring to the clinical phase. We currently want to optimise the user interface, expand the patent portfolio and prepare for industrial scaleup”.
Michela Bulfoni, who as previously said, is a molecular biologist at the Institute of Clinical Pathology at the University Hospital of Udine, is one of the researchers who tested the Lighthouse Biotech device and said: “Translational medicine relies on the continuous dialogue between laboratory and clinic. Working in a hospital allows to directly use real samples, generating data that after validation can enter the clinical pathway. Liquid biopsy helps to gather fundamental information without stressing the patient. Lighthouse introduced a technology that does not require antibody labelling, allows to obtain live cells and speeds up the time with better outcomes than other devices on the market”.
However, there are difficulties, Mrs. Bulfoni pointed out: “Bureaucracy, approval times, and the lack of structured funding make it difficult to bring innovation to the clinic. Yet in Italy, we have excellent minds, universities, and cutting-edge research centers. The problem is not science, but everything around it.”
But that’s not all. There is also a cultural issue that investors need to overcome. “Italian startups are viewed with great interest by foreign investors, who are impressed by the quality of research and the fact that the cost of scientific labor here is significantly lower than, for example, in the United States,” Falcone said, adding: “It is easier to talk to foreign investors. In Italy, the perception of risk is still too negative.“ Yet, he notes, ”it is precisely biotech that can generate significant returns. Many former garage start-ups now trade on Nasdaq. We need confidence and vision. And we need risk mitigation tools, such as the Medio Credito Centrale guarantee, which Utopia is the only one to use on equity.”
In fact, Utopia SIS was the first and so far only investment vehicle in Italy to request and obtain the Mediocredito Centrale (MCC) guarantee, which covers approximately 80% of the investment. This is an excellent incentive offered by Italian regulations and could open the market to new private players, who are still shy today. “We need to broaden the investor base,” Falcone added, “We cannot just rely on public funds. We need a financial culture that knows how to distinguish risk from danger.”
The following article is also part of this Insight View:
Lighthouse Biotech: from lab to Industrial scaleup
