Italy's economy may have contracted for the past three years but one sector is giving entrepreneurs and investors some confidence: technology start-ups. The growing success of Europe's technology sector has often focused on the powerhouses of the U.K. and Germany but Italy is beginning to gain traction. Italy, the fourth largest economy in the Europe, was one of the worst hit during the financial crisis and the mistrust of large companies that rose during this period is one of the reasons people are flocking to start-ups, one investor said. "I do think they (start-ups) have been getting a bit more help and focus in the last few years since the crisis where people have been generally got more skeptical about the big companies which In Italy that were seen as the ideal employers, people are more open to startups," Tony Zappala, partner at Highland Capital, an investor in Italian start-up Shopfully.



Start-ups ‘at the right price’

Italy is also enjoying an increase in venture capital money. Venture capital funding into the country hit $56 million in the first six months of the year, a 12 percent rise from the $50 million during the same period last year.



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One start-up benefitting from the recent interest in Italy is Shopfully, which has made an app that delivers deals on products based on stores near where you are. Founded in 2010, the firm claims to be used by over 13 million people globally and works with over 200 leading brands and retailers. Zappala led a 10 million euro ($ conversion) funding round in Shopfully this month. Stefano Portu, founder and CEO of the start-up, said that VCs find Italy attractive because valuations of companies are not too high, especially compared to more established territories such as the U.S. and other areas of Europe. "If you are an analyst and you look in Italy, it's easier to find something at the right price in Italy rather than an overcrowded market in Berlin and London," Portu told CNBC by phone. "There is less competition in terms of funding, so you can get better opportunities and a lot of funds are starting to see that."



Improving fundamentals