Milan-based Ithaca Investments doesn’t have a website. The investment firm’s digital footprint is so scarce that it lacks any presence on LinkedIn and is rarely listed on fundraising press releases. Yet speak to any Italian tech insider and you’ll find it sits on the cap tables of all the most talked-about Italian-founded startups — from Scalapay, Soldo and Yapily, to Qomodo and Jet HR.
Founded in 2014, Ithaca is the brainchild of Luigi Berlusconi — the youngest of ex-Italian prime minister and media tycoon Silvio Berlusconi’s five children — and the ex-JP Morgan financier Giorgio Valaguzza, who was previously Luigi’s sister Barbara’s partner.
Silvio Berlusconi was one of the most controversial figures in Italy during his lifetime, but his entrepreneurial success is indisputable. After building a media empire in the 1970s and 80s, and owning Italy’s biggest football team AC Milan, Berlusconi later owned controlling stakes in three of Italy’s biggest companies: broadcaster Mediaset, publisher Mondadori and retail bank Banca Mediolanum.
“Coming from such an entrepreneurial family, we [Ithaca] understand how real entrepreneurs are born with something burning inside them — they feel they have to do something,” Valaguzza says.
And there are an increasingly number of them in Italy. Valaguzza, who’s been investing in tech for 14 years now, believes the country’s tech talent is the best it’s ever been — and Ithaca wants in. The firm’s made eight out of 20 investments in its portfolio in the last seven months, and doesn’t have any plans to slow down.
$7bn net worth
It is Silvio Berlusconi’s estimated $7bn net worth — accumulated by the time of his death in June 2023 — that forms the foundation of the family offices H14 and Ithaca.
H14 is the family office Luigi co-owns with his two sisters from his father’s second marriage, which has invested in hedge funds, private equity funds, venture funds and the odd direct venture growth deal since 2011.
“Tech was only just emerging in Europe in 2011,” Valaguzza says. “But Luigi was one of the first to see it was going to be the next thing.”
In 2014 Valaguzza and Luigi hired Luca Bocchio — now a fintech partner at Accel — to drive H14’s growth stage venture strategy. In the same year, they founded Ithaca as a separate company, to focus on early-stage startup investments. Valaguzza declined to comment on the size of the Ithaca fund, but described it as “evergreen”, and said it backs Italian founders in Italy and abroad.
In the last decade, Ithaca has deployed around $25m to 20 early-stage startups through $100-200k tickets at pre-seed and seed stage. Valaguzza says Ithaca is “sector-agnostic”, but it won’t touch capital-intensive medtech and hardware. The majority of Ithaca’s portfolio are fintechs, due to the Berlusconi family’s long-standing ownership of retail bank Banca Mediolanum, according to Valaguzza.
Portfolio companies include London-based expenses management fintech Soldo, London-based open banking fintech Yapily, Berlin-based digital freight-forwarder Sennder, and Italy’s first unicorn, BNPL fintech Scalapay, which Ithaca holds a 1.5% fully diluted stake in, Valaguzza says.
Making relatively small investments, the firm is never a lead investor, doesn’t have a target percentage stake in its portfolio companies, and is open to follow-on investments as companies scale.
“In Italy we say, ‘Come padre di famiglia’. We like to think of ourselves as good fathers of these companies, it’s an evergreen relationship,” Valaguzza says.
Occasionally, the pair have made follow-on investments in Ithaca portfolio companies at later stages through H14, with tickets ranging from $3 to $5m. Italian travel tech company WeRoad is one such example.
“We sit together, we share thoughts and ideas, but we’re separate entities,” Valaguzza is keen to point out.
Controversial investments
On the Italian finance scene, Valaguzza has a good reputation — one high-profile Italian entrepreneur tells Sifted that he has “the best vision in Italy” when it comes to investors operating in the country right now.
“Luigi and Giorgio were some of the first people to put money in startups in Italy when nobody was really investing in the asset class yet,” one serial Italian startup founder tells Sifted. “To his credit, Luigi has done a good job of getting away from his dad’s reputation.”
The connection to Silvio Berlusconi — one of the most powerful but controversial figures in recent Italian business and political history — doesn’t seem to deter too many founders from taking investment from his son. “Money is just money, at the end of the day,” says one Italian unicorn founder backed by H14.
Berlusconi and his two sisters have kept a very low profile compared to their controversial father — apart from a handful of paparazzi photos, a Google search reveals little information about their personal lives.
Not all of Ithaca’s investments have stayed out of the headlines, however.
Back in 2011, Valaguzza and Berlusconi’s first investment in online utilities price comparison site Facile.it (facile translates to “easy” In Italian) was a breakout success. The company was acquired by Sweden’s EQT in 2018, and in 2022, it was valued at $1bn in a buyout by private equity firm Silver Lake Capital.
Valaguzza says that Facile’s founder and CEO Alberto Genovese — who was dubbed the “Re delle startup” (King of startups) for the company’s early tech success — had even begun reinvesting his newly-made wealth in the Italian startup ecosystem after the company’s acquisition.
But behind the scenes, “there ended up being some problems,” Valaguzza says.
In 2020, Genovese was arrested after accusations that he’d drugged, tied up and raped an 18-year-old woman at a party he hosted in his luxury penthouse in central Milan overlooking the Duomo. His arrest gave rise to more accusations of sexual assault. In 2022, he was sentenced to eight years and four months in prison for drugging and raping two women on separate occasions, and recently reached a plea deal with courts for tax evasion, according to local press.
Ithaca declined to comment on Genovese’s personal matters, and said that it sold its stake in his second company, Prima Assicurazioni, in 2018 and has since lost contact with him.
LP to some of Europe’s top-tier VCs
Ithaca was one of the first of a handful of single family offices established in the last few years to invest in venture in Italy. These firms have been launched by some of the country’s wealthiest families, who made millions manufacturing Italy’s most famous exports — from Fiat cars to Technogym equipment. They’re mostly the brainchild of the youngest male heir to the family who’s taken an interest in tech.
In the last couple of years, these firms have ramped up their direct startup investments and have co-invested in early-stage rounds with some of the most high-profile European VC firms — many of whom they have an existing relationship with because they’ve invested as an LP in their fund through a different vehicle in the past.
H14 is an LP in several private equity and venture capital funds across Europe — including Highland, DN Capital, Cherry Ventures, HV Capital and Dawn Capital — and has co-invested with some in growth-stage venture rounds.
This access and networking power means Ithaca get front row seats when it comes to European dealflow, according to Valaguzza, who cites the fund’s investments in Get your Guide, Sennder and Flixbus as the source of its close relationships with several German entrepreneurs and angels who now help Ithaca source earlier stage deals across Europe.
“[Founders] want us to invest in their companies because they recognise that we have an extremely strong network in the country,” Valaguzza says; Ithaca often co-invests together with the other Italian family offices.
“Us, H14, and other family offices that are investing in tech are trying to leverage both our business networks and the industrial assets and relationships that we have from decades of operating the largest companies in Italy,” he says, adding that the families know each other well and enjoy investing together. The family offices that are investing in tech still make up a small minority of Italy’s vast amount of risk-averse private wealth — but for Valaguzza, it’s been a worthy gamble.
“To do stuff properly and nurture a strong tech ecosystem, it’s a case of money first, deal flow comes after, in my opinion,” he says.
“It’s a seven to 10-year kind of game, and now there’s capital around, it’s giving budding Italian entrepreneurs that last push.”
Read the orginal article: https://sifted.eu/articles/ithaca-berlusconi-heir-investment-firm/
