New Italian climate-tech VC makes first investment – with more on the way

Italy’s VC investment growth in the last ten years is nothing short of remarkable. According to Milan-based investment firm P101, from 2013 to 2023 the scene has grown over 600 percent, from just a few hundred million euros to nearly ten billion, aided by increased state fund allocations.

While still a small part of that overall growth, investments in SDG-related startups in Italy have also seen impressive growth, nearly doubling in the last couple of years, hitting €120 million ($123m) in 2023.

Primo Capital's Giusy Cannone, with more than fifteen years investment experience under her belt, says that despite sharing in some of the turbulence seen in Europe the last years, Italy is showing marked progress building its impact scene.

"In between 2024 and 2025 there has been the establishment of five new funds in climate tech, just in Italy," Cannone tells Impact Loop from her home office in Milan.

Growing ambitions for carbon removal

Primo’s new climate tech fund, which closed 40 million euros in June 2024 and ultimately aims to reach 60 million, has placed itself right at the centre of Italy’s impact growth story. This week the fund announced its first investment, partnering with Algebris Investments and Crédit Agricole Italia to inject €6m into sustainable biomaterials startup Krill Design.

Krill will use the investment to build up production capacity for its flagship product REKRILL, a biodegradable polymer made from various organic waste, designed to replace plastics. "Thanks to [this] support," said Ivan Calimani, Krill's CEO and Founder, "we will not only be able to increase production, but also expand our presence in international markets, giving the opportunity to companies that produce products in petrochemical plastics, to have a viable sustainable alternative."

There are plenty more investments to come for Primo Climate. Cannone says they’re actively looking into a company working on recycling the magnets found in various kinds of electric motors and turbines, as well as another working on additives to cut C02 emissions of cement – a major carbon culprit.

Cannone says she also has her eyes on other recycling technologies, and thinks AI data-crunching for energy efficiency is an interesting emerging sector to explore.

Primo’s strategy has a practical focus on quantifiable decarbonisation impact, and their investments reflect that. "There are some sectors that are, honestly, a bit more difficult to measure," says Cannone. "We see that professional investors are trying, when possible, to be more quantitative. I think that the LPs, more and more, want to see what’s behind the impact."

"Being behind can make a difference"

While the developments of the last years in Italy’s impact scene are encouraging, there is still a long way to go for the country, and southern Europe overall, to start approaching the kind of impact financing needed to effect real change.

"Of course, there is a big financing gap," says Cannone. "[But] in Italy, I think that being behind we can actually make a difference."

While overall liquidity for impact in Italy remains small compared to northern Europe, for instance, she is optimistic that the increased vertical specialisation seen in recent years will help to attract bigger general funds to take part.

She also says she sees positive signs all around, from growing domestic interest in climate-tech investing, to the growing impact of EU sustainability regulations such as the SFDR, as well as an increasing professionalisation in the impact sector, following Primo’s example with its focus on quantifiable impact.

Long way to go

Looking ahead, Cannone says the fund is still finalising the metrics they use to measure their impact, but the next ten years will see investments in carbon removal startups of various sizes. Cannone emphasised the importance of transparency with LPs on timelines for various investments within that period, as "we know that in some cases, these startups take time."

As with many people in the impact sector, Cannone’s journey has been a long and somewhat twisting one, seeing her based in various continents and (perhaps unsurprisingly given she is based in Milan), long experience with one of Italy’s leading fashion accelerators. Having now launched Primo’s Climate fund along with partners Ezio Ravaccia and Simone Molteni, Cannone says she’s following her passion.

"Working with an impact is what makes you feel happy when you go to work every day."