A new AI-powered platform aims to revolutionize M&A for Italy's SMEs, founded by three young entrepreneurs to bridge the gap in business transactions and unlock potential in the Italian economy.
Article written by Eleonora Cornacchia.
According to the Digital Innovation Observatory of the Politecnico di Milano, small and medium-sized enterprises, also known as SMEs, represent a key element in the Italian productive system. Micro-enterprises alone, meaning companies with fewer than 10 employees, represent 95.13% of the total in Italy. When adding actual SMEs (with 10 to 250 employees and an annual turnover under 50 million euros), this figure constitutes 99% of the market. Small and medium-sized enterprises alone, excluding micro-enterprises, are responsible for 41% of Italian turnover.
Despite the importance of this sector for the Italian economy, SMEs often face significant challenges in buying and selling processes, as they are not considered by large M&A groups due to their reduced size and generally lower turnovers, typically below 25 million euros (with maximum peaks of 50 million).
Founded by three young people under 25, Nicolò Joswig, Jacopo Farris, and Claudio Muca, Startex is an innovative startup that addresses the gap in the buying and selling of small and medium-sized companies by automating, standardizing, and simplifying processes through an Artificial Intelligence algorithm.
The startup, affiliated with Milan’s Fintech District and Confindustria Lombardia, will enter its operational phase in the winter of 2024/2025 and aims to guarantee perfect matchmaking between supply and demand in M&A processes involving SMEs. Thanks to an AI algorithm, investors and private individuals will be able to select the investment opportunities that best match their expectations and close the deal directly on the Startex platform. Likewise, entrepreneurs and companies will have the option to list their business for sale quickly and easily, supported by Startex's proprietary software. The integration of OpenAI’s ChatGPT 4.0 will enable users to conduct a preliminary rapid assessment of their company and be just a few clicks away from a sale.
Co-founder and CEO Nicolò Joswig commented: “The potential of micro, small, and medium-sized enterprises is often underestimated, even though they are a driving force of the Italian economy. Startex was developed within this context to meet the needs and challenges of the market, transforming them into synergies and enabling SMEs to reach their full potential through M&A.”
The Startex platform will be simple and intuitive to use, suitable for all types of users. By entering a few financial data points, such as EBITDA, revenue, and a description of the business, it will be possible to estimate its value and publish a complete listing for sale. At the same time, the platform also addresses the buy-side, allowing investors, entrepreneurs, and private individuals to purchase companies or business branches through the AI system, which will display results based on the alignment between the investor's expectations and the listings on the platform. Additionally, an AI chatbot will be introduced to the platform to guide users in utilizing all its features and to clarify any doubts or needs.
The CTO of Startex, leveraging his twenty years of experience, decided, together with the technical team, to adopt artificial intelligence solutions provided by OpenAI. This choice was made as a result of significant advancements in artificial intelligence for M&A. However, cutting-edge AI does not yet guarantee a level of precision and professionalism that can be considered autonomous, but rather serves as a simple co-pilot supporting the user. This approach is also aligned with being transformers and innovators "made in Italy" in the M&A sector.
Startex will charge a fee ranging from 6% to 10% for its services, aligning with the fees requested by major investment banks. The company will also earn revenue from additional services, such as offering professionals available to assist with transaction services, third-party sales of products for SMEs, and advertising on the platform to provide visibility to businesses and professionals.
Startex is preparing for its first major investment round, where it will seek capital from venture capital firms and business angels to enhance the platform and invest further in innovation and automation to increase its competitiveness in the market.
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