After the financial crisis that began in 2008, Italy has adopted numerous legislative measures to offer new alternative financing channels for SMEs and strengthen existing ones, with the aim of increasing the competitiveness of the ecosystem. More recently, a certain has been added focus on the topic of the ‘real economy’‘, thereby referring to the business world of ‘private capital’, or unlisted companies. The research paper “Alternative finance for SMEs in Italy” edited by Politecnico di Milanowith the support of Unioncamere, Chamber of Commerce Milan Monza Brianza Lodi and Innexta, now in its sixth edition. The research identifies 7 specific areas for the collection of financial resources for SMEs:
The minibond industry, bonds issued by unlisted companies, has gained a foothold growing market share in Italysince 2013 when the regulatory innovations initiated by the ‘Development’ Decree and by decrees subsequent ones have facilitated the opportunity for SMEs to place financial bonds and bills on the market, subscribed by professional investors (typically banks, private debt funds and asset management companies) and recently also placed on crowdfunding portals (although only to certain categories of investors and only for SpA securities).
The SMEs Italian non-financial companies minibond issuers until June 30, 2023 there were 696. They have placed 982 titles collecting 3.95 billion euros. Among these, only 29 appeared on the market for the first time in the first half of 2023, which represents a negative signal for the development of the market. The equivalent value placed in the last 12 months covered by the research was of 902 millionof which 584 million in the second half 2022 but only 318 million in the first half of 2023 (a significant decrease compared to the same period of 2022).
Following the market dynamics, the required annual coupon has risen noticeably, arriving at 6.17% fixed and 7.27% variable. The absence of new ‘basket bond’ programmes, i.e. system operations involving multiple companies under the direction of important investors such as the Cassa Depositi e Prestiti, contributed to the market decline; only in recent weeks has there been a ‘restart’.
Equity crowdfundingor the placement of risk capital shares on portals authorized by Consob, saw a good growth rate until 2021 also thanks to the extension of this opportunity to all SMEs, initially reserved for startups and innovative SMEs. There are 1,110 Italian companies who tried to raise venture capital on authorized Internet platforms until June 30, 2023, leading to 989 successful campaigns. These are largely innovative startupsbut other SMEs have also arrived with operations in the real estate sector. In the last 12 months observed the collection was equal to 143 million. In the first half of 2023, collections amounted to 58 million, with a significant decrease compared to the previous half-year. The topic of the moment is the definitive entry into force of the ECSP European Crowdfunding Service Providers Regulation, which as of 11/17/2023 sees ‘only’ 11 platforms authorized in Italy compared to the dozens that were previously operational. As regards the lending platformswhich provide loans to businesses financed or co-financed by small savers on the Internet, they have channeled money to Italian SMEs for 39 million in the last annual period, to which is added the contribution of numerous lending platforms specialized in real estatewhich they have contributed well over the last 12 months 116 million. Complete the picture reward-based crowdfunding; we are talking about small-amount campaigns (mainly conducted on US portals such as Kickstarter) that Italian companies have launched to raise money by offering products and non-monetary rewards in exchange. This is a quantifiable contribution a few million euros per year.
The Italian invoice trading platforms continue to mobilize for Italian SMEs hundreds of millions of euros but not all of them make their data transparent. The research surveyed 15 operators (2 more than last year). It should be noted that the investment cycle in this area is much shorter, since it is the transfer of expiring commercial invoices to professional investors on average 3-4 months, which are often used as an underlying for securitization transactions. . It can be estimated that this financing channel has been adopted by a good number of Italian SMEs and is certainly the relatively most used instrument of all those considered.
Here we refer to theopportunities for non-banking entities (in particular credit funds and fintech platforms) to provide direct loans to businesses. This is the segment where it is most difficult to collect exhaustive information, because it is not publicly available and because it is not always easy to distinguish the SME segment (where mainly some specialized players operate) from large companies.
Crypto-assets and digital tokens
Thanks to fintech innovations and blockchain technology, it is now It is possible to generate digital tokens usable not only as cryptocurrencies, but also as tools access to services and investmentsas well as for ‘tokenize’ traditional securities and financial assets. A few years ago there was a real boom on the Internet digital token offerings (Initial Coin Offerings, ICOs), exchangeable on specialized platforms; more recently we have seen the equally volatile ‘fashion’ of NFTs (Non-Fungible Tokens). This has raised understandable concern from market authorities.
Private equity and venture capital
Although active for some time, the Italian private equity market and above all of venture capital it is still undersized compared to the situation in Germany and especially France, despite 2022 being a record year compared to the past. Reference is made to investments made by professional entities in the field of private equity and venture capital, by underwriting risk capital of unlisted companieswith the ambition of actively contributing to the growth of the company in an active way, and then obtaining a capital gain at the time of exit (i.e. the disposal of the shareholding with the sale to third parties or with the listing on the stock exchange).
Regarding the resources allocated to venture capital interventionstherefore typically aimed at supporting micro-enterprises in the seed or startup phase, is confirmed as one good trend growth starting from 2020both in the number of operations (547 in 2022, a record for Italy) and in the investment flow which for the first time exceeded 1 billion euros. 2023 also started well despite the economic difficulties, with 232 operations for 410 million in the first 6 months. As for the expansion investmentstypically aimed at the growth of already established businesses (including certainly many SMEs also active in traditional sectors) the trend is confirmed as decidedly inadequate compared to the Italian potential, especially for the number of operations. In 2022 AIFI recorded 46 deals with 483 million invested (with a decrease of 44% compared to 2021). The first half of 2023 did not bring good news with only 18 deals and 210 million invested.
Listing on the stock exchange
Finally, the report highlights the collection that SMEs have made on the stock market through IPO– Initial Public Offeringespecially on Euronext Growth Milan, the SME Growth Market of the Italian Stock Exchange. At the end of June 2023 the market reached the threshold of 192 listed companieswith a collection of liquid resources (considering the capital increases carried out at the listing or even subsequently) which is equal to 309 million in 2022 and ‘only’ 100 million in the first half of 2023. In reality, the second half of 2023 seems to show signs of recovery, but the issue of the attractiveness of the stock market remains, with a series of policy efforts such as the DDL ‘Capitals’ which introduces a series of interesting opportunities also for SMEs, including the possibility of dematerializing the shares of LLCs.