- Z_One Fund has closed its first round at over €35m, with CDP Venture Capital as one of the investors.
- In July, Luigi Capello stepped down as Zest CEO to become fund manager alongside two former Zest investors.
- The fund aims to raise €60m and is looking at up to 100 pre-seed and seed deals in AI and urbantech.
Luigi Capello spent over 10 years building up a listed startup accelerator in Rome. He stepped down as CEO of the company’s successor, Zest, in July to run a new fund, Z_One Fund, that just closed at €35 million.
Z_One Fund invests in pre-seed and seed stage startups and is managed by Eureka! Venture SGR, a Milan-based asset manager regulated by Banca d’Italia and Consob. The fund’s investors include CDP Venture Capital, Zest, Fondazione Compagnia di San Paolo, and several other private investors.
The fund aims to raise €60 million and plans to make up to 100 investments, with initial cheques of up to €250k and follow-on funding for those that achieve key milestones. It will start in Italy but expects to grow both its portfolio and its deal flow across Europe.
Z_One Fund will invest in startups using AI in business processes, public administration, and citizen services. In the urbantech space, the fund is looking at efficiency, resilience, electric and connected mobility, smart water and waste management, smart urban services, security, and public space.
Italy’s pre-seed funding gap
Capello, Giulio Montoli, and Giulia Fazzini have made over 340 investments, delivered over 25 exits, and manage more than €80 million. The portfolio comprises FitPrime, Robot.com, JetHR, Vikey and 2Hire.
“Z_One Fund was created precisely with this ambition: to offer investors broad and diversified exposure to innovation, supporting new entrepreneurs from the very earliest stages of development through a unique model that integrates investment and acceleration,” said Stefano Peroncini, CEO of Eureka! Venture SGR, manager of Z_One Fund.
Recent data makes the funding gap very clear. Italian startups raised €813 million in 145 rounds in H1 2026. Fabio Mondini de Focatiis, founding partner at Growth Capital, notes that while average deal size increased, pre-seed and seed deals actually declined.
Tech Funding News reported in August that pre-seed activity in Italy has fallen dramatically despite increasing deal sizes. In June, Italy’s per capita venture investment in 2025 was €127 million, the 3rd lowest in Europe.
Other funds are also looking at early-stage founders. P101 SGR has merged with PranaVentures to create Prana101, a €100 million pre-seed and seed fund with a first close expected at the end of 2026. Vento launched its second fund of €75 million in March 2025, with initial cheques of €150k and plans for 375 investments. Step Fund closed over €30 million in November 2025, with CDP as the anchor investor, providing €20 million.
Zest’s involvement in every aspect of the fund
Z_One’s structure closely aligns with Zest. In October 2025, they purchased 20% of Eureka! Venture. According to Teleborsa’s July report, Zest was the fund’s first private investor, with a €5m commitment. Zest also provides the fund’s pre-seed programme for startups, with exclusive advice from Zest group companies.
“With Z_One Fund, Zest strengthens its VC-led model and puts to use a unique positioning that covers the entire supply chain: from scouting to acceleration, from investments to open innovation and connections with industry. The dual role of LP and advisor allows us to contribute to the Fund’s growth and to enhance its results, with the concrete opportunity to generate returns and create value on the investment,” said Marco Gay, CEO of Zest.
The bigger challenge comes at the later funding stages. In 2025, Italy had around 53 Series A rounds and only 14 Series B rounds. A fund making 100 early-stage investments will create a large number of companies all looking for Series A funding.
CDP points out that its new accelerator fund can invest directly in the very best companies in the later rounds. Whether Z_One can help its portfolio companies get past this bottleneck will test whether the accelerator-and-fund model is worth repeating.
