For about five years we've been watching a phenomenon that we, as an agency, get to observe from the front row: Italian founders leaving the country to seek capital move first to London, then Berlin, occasionally New York, increasingly rarely Paris. It's a technical migration, not sentimental: they go where the funds and the buyers are. It's gone on for years with a worrying consistency.
In the first half of 2026 something slightly different is happening. Not a reversal of the trend — that would be too much to say — but a measurable deviation. Some of those founders are coming back. Others aren't leaving anymore. Others still try to keep a foot in both places.
Today's piece tries to read this phenomenon. Without phony optimism, without afternoon pessimism. What we see, and why the details matter.
The numbers of the first semester (for those who love orders of magnitude)
Premise: anyone who promises you fundraising numbers to the first decimal in June 2026 is making them up. Definitive semester data is seen in September/October. What we can say, from coincident signals of serious observers — Italian Tech Week, Mind the Bridge "Tech Scaleup Italy", InnovUp, P101 and reports from institutional investors — is this.
Seed and pre-Seed rounds. Volumes holding, quality improving. The 2025 effect (more selectivity) shows: fewer useless rounds, more targeted ones. Good news.
Series A rounds. Recovering from the bottom hit in mid-2025, but still below 2021-2023 levels. Hard to close rounds beyond 10-15 million euros with only Italian investors. For those, you almost always need at least one foreign co-investor.
Late-stage rounds (Series B and beyond). The real Italian black hole. Almost no Italian fund is structured to close 30-50 million rounds. Startups reaching that level do one of these things: (a) find an American or European fund, (b) get acquired by a corporate, (c) relocate to simulate being "European" instead of Italian. Same problem for ten years. No government has managed to solve it.
M&A. Sustained volume, more realistic valuations than 2023. Scaleups unable to close a Series B got bought, often at multiples of 3-5x ARR. Below pre-2022 numbers but above the 2025 floor.
Translated: the ecosystem is less in free fall than a year ago, but the late-stage gap remains structural problem number one. Everyone knows it, nobody has the solution.
Where the money is going (category by category)
We care about the three macro-trends where capital is concentrating in 2026.
1. Vertical applied AI. Not models (Americans do those with billions of dollars), but applications: AI for specific sectors — agritech, medtech, manufacturing, logistics, legal-tech. Here Italy has skills, use cases, and a scene of founders who understand the sectors they build for. European investors have noticed.
2. Climate tech and sustainability. The strand grew quietly. Not with the loudness of 2021, but with patient and more targeted capital. Energy, mobility, alternative materials, environmental agritech. For Italian startups there's a specific advantage: the European market is more regulatorily mature than the rest of the world, and this translates into public and private clients willing to pay for real innovation.
3. B2B SaaS vertical for European SMEs. What they call small but mighty: software sold to European SMEs that need to digitize specific processes. Nothing unicorn-worthy, but many companies with 5-15 million ARR, profitable, sellable at reasonable multiples. It's the segment where many Italian founders, after 2025, chose to stay. Grow, invoice, eventually sell. Don't chase the billion.
The three strands have something in common: they are coherent with what Italy knows how to do best. Vertical sectors, deep domain knowledge, direct customer relationships. They are not the strands where Silicon Valley shines. They are the strands where thinking Italy shines.
The four strategic changes we see
Working with Italian startups and scaleups on branding and go-to-market projects, we've noticed four strategic moves spreading in 2026 that deserve a name.
Move 1 — "Ask less money, prove more". Good founders in 2026 are closing rounds smaller than expected, at valuations lower than expected, but with better conditions: less founder dilution, less board control, realistic milestones. All this in 2021 would have seemed like failure. In 2026 it's discipline.
Move 2 — "Profitability first, scale second". Sharp inversion from the "growth at all costs" of 2020-2022. The startups we see arriving at Series A in 2026 have, at minimum, a credible path to profitability at 18-24 months. J-shaped vanity-metric graphs aren't enough anymore.
Move 3 — "Dual operating base". Legal HQ and CFO in Italy, commercial HQ and VP Sales in London/Berlin/Amsterdam, distributed development. It's not a romantic choice, it's a fiscal and cost choice. It allows you to keep the Italian tech team (more stable, more trained) and have an international facade for investors and enterprise commercial pipeline.
Move 4 — "Brand before product". This is the one we like most, and it speaks about us too. Italian startups that work in 2026 understood something: in a market where everyone has something in AI, something in sustainability, something in SaaS, the brand is what separates them. Not the logo, not the slogan: the coherence of the narrative they produce in their channels, the authority of their thought leadership, the clarity with which they explain why they exist. It's a serious branding move, done early, and done by founders who on American blogs would be labeled as "premature". In Italy, today, it's survival.
Why some are coming back
We come to the headline phenomenon. Coming back means something specific: it means Italian founders who in their thirties had moved HQ and operations to London (more rarely, San Francisco) today are relocating part of the company to Italy.
The reasons we hear, repeatedly, in conversations:
- Costs. London post-Brexit is almost as expensive as NY, without NY's funds. Berlin stopped being cheap. Milan and Rome, for certain technical profiles, are reasonable.
- Talent. The pool of Italian developers is still under-priced compared to real quality. Many Europeans discovered it. Italian founders rediscover it.
- European single market. European regulation — AI Act, DSA, DMA — is unifying markets. A B2B startup selling to European SMEs doesn't need to be in London. It can be in Bologna.
- Life. Always cited as the last reason, almost embarrassedly. But it's honest. After ten years in London with 2026 prices, Italian quality of life is a serious argument.
It's not an exodus. It's a correction. And in the medium term, if the trajectory continues, it's one of the rare reasons for structural optimism for the Italian ecosystem.
What to do if you're in the middle of all this
Three operational recommendations, for those planning a round or scale choice in the next 12 months.
Define your brand before writing it in the pitch deck. Investors in 2026 demand narrative coherence much more than 2021 investors. A good slide isn't enough: you need a site, a social presence, and a recognizable voice. We've seen it make the difference more than once. It's not marketing added to the pitch — it's the pitch.
Build the dual operating base, even if you're small. Find an advisor or advisor in London/Berlin/Amsterdam. Open even just a commercial mailbox there. The signal you send to investors changes a lot, and costs are negligible.
Measure profitability before revenue. Start looking at gross margin before the topline. Calculate the customer payback period. They're numbers that in 2022 seemed backward. In 2026 they are standard. If you don't know them today, investors stop answering your emails.
Thursday, June 25 we talk about the other face of the AI coin: phase 2 of the AI Act, which took effect this year. What changes for companies that use (don't develop) artificial intelligence, and why for Italian SMEs it's news disguised as good news.
Are you preparing a round or scale move? We work with Italian startups on brand identity and pre-fundraising narrative. Let's talk.