We recently did an interview with Antonino Saccà, CEO & Founder of the Private Equity Fund Hephaestus Venture. He’s currently aiming at a €100 million fundraising and the creation of new business units focused on the open innovation of the Italian Corporate Venture Capital and to support them to expand their business abroad in the EU,
US and the BRICS.
Why are you focusing on Corporate Venture Capital?
We need managers who want to become entrepreneurs and support the Digital Transformation projects of large Italian companies bringing with them ideas and strategy. Running international business is a serious thing, startups are too important to be managed by personnel who have not an entrepreneurial attitude and not by mere executors, so it requires people with vision and decision-making ability, typical of company men, provided that they have been able to update their skills by bringing their vision with them and not only providing a mere technical support but to be true business partners of the Corporate from which they come.
What are the best business partners to start approaching Open Innovation Projects?
We have and are tightening agreements with the best International and Italian universities and business schools such as Bocconi, Luiss, Polytechnic of Milan, Cattolica, and we are joining their partner companies who are contacting us because we want to reach their students and their Executive MBAs to develop their Projects and support the Corporate from which they come to develop them in outsourcing. Working with young students or researchers without work experience would not allow the development of any strategy. For this reason there are no real Scaleup case studies in Italy, because there are few serial entrepreneurs from previous successful experiences. Those who fund such startups made up of inexperienced teams do so with public funds, no private company would ever finance teams without any experience and for the same reason almost none of the Italian Private Funds has a branch abroad, because being financed by the public they cannot go ‘abroad. No Public Fund can therefore finance the ScaleUp of a company, they are public bailouts, especially if the public is expected to enter the private capital. For the same reason, being a private company, we only link ourselves to private companies such as the universities mentioned above and exclude collaborations with Italian and foreign public funds. This means that we compete in a public industry in Italy dominated by public investments at 90% and therefore for this reason no Private Fund or Italian Accelerator is our direct competitor since they manage all public funds and therefore do the interests of the public before those of the private. We therefore position ourselves as Opponent and not as Follower of the other players in the sector and our only direct competitor in Italy is Startupbootcamp which is in fact a Dutch company.
What is your mission and Corporate Strategy?
It is our mission to allow the entrance of equity investments into these projects of alternation between the academic world and the world of work. We want to support both companies and those managers during their transition of change and innovation and evolution. As in my experience in the advertising industry, we sell ideas and services in the same way we sell a vision of change and expansion towards unexplored markets for our corporate clients.
All our strategy has been focused since the early stage on an aspect on which no one initially aims: the foreign market. In this way we have been able to attract the first customers and therefore we started developing their products or investments. Our fund itself has 2 lines of business, the first focused on the sale of services to the Italian Corporate Venture Capital and the second to the consultancy support on investments that are the startups or the Accelerator products which represents the operations of the Fund. Our investors are therefore our corporate clients who choose us because we offer something unique and different in Italy on a industry expected to grow in double digit in the upcoming years.
What are the rationals of investment into digital startups?
Every startup must always be composed of two fundamental components, business development and product, but the aspect of marketing remains fundamental, since a startup that is not able to find clients itself has not been able to make a strategy and therefore has no chance of success. For this reason, as I said above, if you do not have many years of experience in sales or strategic marketing and you think to sell products or services before having clients interested or that they commissioned that specific product, that startup is therefore destined to failure. We have sold the idea of greatness, of expansion to new markets, and when you want to open new markets and sell a project, you address precisely as mentioned above to a business developer you know with whom you had a successful case histories on the same ground on which you will launch the challenge.
What are the markets and verticals you are focused on?
The markets on which we support Corporates are therefore: the United States, Italy, Germany, United Kingdom and BRICS: Brazil, China, India, Russia and South Africa. The verticals on which we are focused are those ones of Digital Health, Energy, Smart Mobility and FinTech. The positioning goes from the Micro-Seed to the Series A. We chose Milan as our headquarters because it is the economical capital of Italy and here is the ecosystem of the Corporates focused on ICT and even the market of Investments is concentrated in Lombardy with over 47% of the share according to the latest AIFI (Italian Association Investment Funds) data. It means that if you want to invest in successful digital startups in Italy you can do it only if you are in Milan because customers, suppliers and investors are here exactly as if you want to invest in the Germany you have to go to Berlin or United States going to California in the Silicon Valley because over 54% of US Investments in Venture Capital are there.