Venture capital for the development of smart cities: the Italian case

Urban transformation represents an increasingly urgent goal in accelerating the transition towards innovative, sustainable and digital cities to make them more efficient and smarter. An extraordinary availability of public funding is currently mobilized to this effect; however, it is not sufficient to pursue sustainability goals. Since the acceleration of smart city growth requires a huge amount of investment, venture capital could play a key role in launching the smart city of the future. In our research we analyse the role of venture capital as a promoter and accelerator of industrial sectors through the financing of innovative start-ups and funding disruptive technologies, which impact the smart city. Descriptive analysis was conducted based on data collected through venture capital deals carried out in Italy during the period 2015 to 2021, as monitored by VeM, selecting specific industries which impact the smart city: digitalization, ecological transition, financial services, healthcare and mobility. The results suggest that there is an overall growth of interest from venture capitalists in investing in the smart city, which makes the market more dynamic and ready to accelerate urban transformation. This represents an impressive trend that may be good groundwork for further growth in the years ahead.