Zest and Eureka! Launch €55M Z_One Fund for Italian AI and Urbantech Startups
TL;DR
Italian innovation platform Zest and asset manager Eureka! Venture SGR have launched Z_One, a new early-stage venture fund targeting €55 million to back pre-seed and seed startups in AI applications and urbantech. The fund is managed by Eureka! (in which Zest holds a 20% stake), with Zest acting as sponsor, advisor and lead private investor via a €5 million commitment. The launch coincides with a governance reshuffle at Zest, Marco Gay steps up to CEO while Luigi Capello, LVenture Group's original founder, exits the Zest chief-executive role to run the fund.
Key Takeaways
This is a platform play, not just a fund. The real story is Zest wiring together the full innovation value chain, acceleration and commercialisation of research on one end, venture capital and entrepreneurship-through-acquisition on the other. Once fully operational, Zest expects €130 million to €200 million in direct and indirect AUM. Z_One is the venture engine bolted onto an existing accelerator and scouting machine, which is a structurally different animal from a standalone first-time fund.
The team is a lift-out, not a fresh hire. Z_One is led by Luigi Capello alongside Giulio Montoli (former CIO of Zest Investments) and Giulia Fazzini (former senior investment manager at Zest Investments). This is the existing Zest investing team moving into a dedicated vehicle, so there is continuity of deal flow and track record rather than a cold start.
Concentration discipline is baked into the strategy. The model is deliberately two-phase: broad diversification with pre-seed cheques up to €200,000, then follow-on concentration up to €1 million into the companies that break out. Planning for up to 100 investments off a €55 million target is a high-volume, index-then-double-down approach, sensible for pre-seed, but it puts enormous weight on selection and reserve discipline.
AI plus urbantech is a sharper thesis than it looks. Pairing AI as a horizontal with urbantech as a vertical, cities, infrastructure and urban services, gives Z_One a differentiated lane in an Italian market crowded with generalist micro-funds. Urbantech is under-capitalised relative to its addressable market in Europe, and Italy's infrastructure base gives local funds a credible right to play there.
Fund Overview
Fund Name: Z_One
Fund Size: €55 million target
Stage: Pre-seed and seed
Check Size: Up to €200,000 initial (pre-seed), follow-ons up to €1 million
Geography: Italy-centric, within the broader European ecosystem
Focus: AI applications and urbantech
Key LPs: Zest as lead private investor (€5 million commitment); managed by Eureka! Venture SGR
Why This Fund Matters
Italy has spent the last few years trying to build a venture ecosystem that can retain its best founders rather than exporting them to London, Paris or the US. The structural gap has always been at the earliest stages, capital that can move fast, take real pre-seed risk, and plug founders into commercial partners. Z_One is explicitly designed to fill that gap, and the integration with Zest's accelerator and corporate network is the mechanism.
The managing entity matters here. Eureka! Venture SGR, led by CEO Stefano Peroncini, has raised more than €135 million to date across venture and private equity funds focused on innovation and SME growth, including deep-tech and research-spinout strategies. Layering an AI-and-urbantech pre-seed fund onto that platform gives Z_One institutional-grade fund administration and LP relationships that a genuinely new manager would lack, an underrated advantage when Italian institutional LPs are still cautious about backing venture.
The governance reshuffle is more than corporate housekeeping. Luigi Capello founded LVenture Group in 2013 and has been one of the most persistent builders of Italian early-stage infrastructure. His decision to step down as Zest CEO specifically to run Z_One is a signal about where he sees value creation, in the fund and its integrated model, rather than in the holding company. Marco Gay, moving from executive chairman to CEO, inherits a business explicitly reoriented toward a VC-led structure under the 2025-2029 plan.
For the wider ecosystem, Z_One is another data point in a broader European trend: investment funds and accelerators converging into single platforms, mirroring international benchmarks where funds increasingly run their own accelerators and vice versa. Whether that integration produces better returns or simply more surface area is the question every LP in this structure should be pressing on.
The Team
Z_One is led by Luigi Capello, founder of LVenture Group and, until this transition, CEO of Zest. Alongside him are Giulio Montoli, former Chief Investment Officer of Zest Investments, and Giulia Fazzini, former Senior Investment Manager at Zest Investments. The team cites exit transactions generating over €20 million across its track record, and its continuity from the Zest investing operation is presented as a core differentiator. On the management-company side, Eureka! Venture SGR is led by CEO Stefano Peroncini. At the parent level, Marco Gay is now CEO of Zest and Marco Giovannini, an independent director since 2017, becomes non-executive chairman.
What This Means for Founders
If you are an Italian or Italy-adjacent pre-seed founder building in AI applications or urbantech, Z_One should be near the top of your list, especially if you value hands-on acceleration and corporate introductions over a purely financial cheque. The Zest platform connection means the fund can plausibly help with commercialisation, pilots and corporate partnerships in a way most micro-funds cannot, and the up-to-€200,000 entry cheque is well-calibrated for a first institutional round.
Set expectations on ownership and follow-on, though. A fund planning up to 100 investments from a €55 million pool is running a high-diversification strategy, which means initial cheques are small and meaningful follow-on is reserved for breakout performers. Founders should understand where they sit in that funnel and press the team on reserve strategy, if you are not in the concentration tier, you will need other capital sources for your Series A.
Fund Momentum Take
Our take: Z_One is one of the more thoughtfully constructed additions to the Italian early-stage landscape, precisely because it is not trying to be a pure financial fund. The accelerator-plus-fund integration is the right structural answer to Italy's pre-seed gap, and the Eureka! management wrapper solves the institutional-credibility problem that sinks most first-time Italian managers. The AI-and-urbantech focus is narrow enough to be defensible.
The honest risk is the one embedded in the model itself. Integrated platforms that promise to cover "the entire value chain" can dilute focus, and a 100-investment pre-seed strategy lives or dies on selection quality and reserve discipline, both of which are hard to execute at volume. The €20 million in prior exits is a respectable but modest track record for the concentration thesis to lean on. There is also key-person concentration around Capello, whose move into the fund is both the strength and the single point of dependence.
Our bet: Z_One will become a genuine anchor in Italian pre-seed, with its edge coming from proprietary deal flow and corporate access rather than from cheque size. The urbantech angle in particular could produce an outlier if the team gets one or two infrastructure-adjacent bets right. The number to watch is not the €55 million target but the eventual reserve ratio, that will tell you whether this is a real conviction fund or an index of the Italian early-stage market.
Frequently Asked Questions
How large is the Z_One fund?
Z_One is targeting €55 million, with Zest committing €5 million as lead private investor.
Who manages the fund?
Z_One is managed by Eureka! Venture SGR, an independent asset manager in which Zest holds a 20% stake. Zest acts as sponsor and advisor, providing deal flow from its acceleration and scouting activities.
What does Z_One invest in?
Early-stage startups, primarily pre-seed and seed, focused on AI applications and urbantech (technology transforming cities, infrastructure and urban services).
What are the cheque sizes?
Initial pre-seed investments of up to €200,000, followed by concentration follow-ons of up to €1 million in the strongest performers, across a planned total of up to 100 investments.
Who is leading Z_One?
The fund is led by Luigi Capello (founder of LVenture Group), with Giulio Montoli (former CIO of Zest Investments) and Giulia Fazzini (former senior investment manager at Zest Investments). Eureka! Venture is led by CEO Stefano Peroncini.
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