The number of startups with significant social or environmental impact is growing in Italy: this is shown by the Social Innovation Monitor (Sim) study.
LifeGate Way has always selected startups that want to have a positive social or environmental impact and helps them grow. The question is a legitimate one: are these companies still exceptions to the rule? Or, on the contrary, do they constitute a movement that is beginning to carry its own specific weight within the Italian entrepreneurial fabric? Some answers are provided by the new edition of the annual report by Social Innovation Monitor (Sim), an international team of researchers and professors coordinated by Paolo Landoni.
The report has a clearly defined focus: startups with significant social and environmental impact. But what does that mean exactly? Imagine a continuum with non-profit organisations at one end and for-profit companies at the other. In between lie many shades, because there are businesses that set out to maximise their profits but want to do so while leaving a positive footprint — certified or otherwise — on the environment and society.
This is precisely where the startups studied in the report sit, which, as startups, are characterised both by their recent founding (under Italian law, they retain that status for the first five years) and by their capacity to bring an innovation to market — that is, a solution that is more effective, efficient, fair or sustainable than existing ones.
To put this nature on record, these companies have the option — but not the obligation — to register as benefit corporations or B corps. Or, alternatively, as innovative startups with a social vocation (the Italian acronym is Siavs). This legal form, introduced by the 2016 Stability Law, applies only to certain sectors: social and healthcare assistance, enhancement of cultural heritage, social tourism, education, instruction and training, environmental protection, cultural services, extra-curricular, university and post-university training.
After the definitions, let us turn to the data. Filtering out those in liquidation or that do not meet certain legal requirements, the innovative startups registered in the special section of the Companies Register at the end of 2023 number 10,629. This figure has fallen by 9.2 per cent compared with the previous year, because the number of new startups (1,834) cannot keep pace with closures and the loss of status. Once again, the geographical distribution is skewed towards northern Italy (accounting for 54.2 per cent of the total), and in particular towards Lombardia, which alone accounts for 28.1 per cent.
Operational Siavs (innovative startups with a social vocation) number 142, down by as much as 20 per cent compared with a year earlier: two in three are based in northern Italy. Conversely, benefit corporations continue to advance: there were 2,085 at the end of 2022 and 2,795 at the end of 2023, including 511 innovative startups. The B corp form is also growing in popularity, with 276 operational companies in Italy (up 40.1 per cent compared with the end of 2022), though only 13 of these are startups. Northern regions lead the way in these cases too, but the growth trend cuts across all areas.
Looking, however, at all startups with significant social and environmental impact, whether or not they are registered under the forms described above, the total comes to 640. This is a very interesting figure because it represents a 9 per cent increase on the previous year, going against the trend of startups as a whole (which, as already noted, is declining). As a result, their percentage share is ever higher: they now account for 6 per cent of the total, almost double the 3.1 per cent recorded at the end of 2020. No fewer than 258 are based in Lombardia: adding the other northern Italian regions, the figure exceeds 50 per cent.
Of course, having an innovative and sustainable idea is one thing; managing to turn it into a financially sound business is quite another. This explains why, for startups with social and environmental impact too — much like their counterparts — average revenues (€117,500) differ greatly from median revenues (€13,200): for many of them, revenues are still at zero (the figure refers to 2022 financial statements and a sample of 462 startups).
Selecting the best performers in terms of revenues, employees and financial resources yields a group with solid results. On average, their annual revenues approach 3 million euros, with an average growth rate of 117 per cent, twenty employees and $4.1 million raised each. Among this select group of standout companies are, for example, Up2you, a service that helps businesses decarbonise their activities and events, and the training platform Epic Education.
