Industrial startups and credit: A shared challenge for European competitiveness
An interview with Massimo Portincaso
*Translated with Claude – read the original article in Italian here
According to the CEO and co-founder of Arsenale Bioyards, new financial instruments need to be developed to support innovative manufacturing. "There are no off-the-shelf solutions, but it is strategic to start building them now."
Europe's industrial autonomy is at stake.
To preserve and revive European industrial capacity, advanced technologies, entrepreneurial ideas, and scientific expertise are not enough. An evolution of financial instruments is also needed, capable of supporting the emergence and growth of innovative industrial startups: companies that do not only develop software or digital services but build factories, purchase machinery, and generate new productive capacity.
This is the starting point for the reflections of Massimo Portincaso, CEO and co-founder of Arsenale Bioyards, who looks to credit as a strategic lever for strengthening Europe's competitiveness against the United States and China. It is a challenge that Arsenale Bioyards experiences directly in its own growth path.
Founded in 2023, the Italian biotech startup is developing an advanced biomanufacturing platform based on precision fermentation, reprogramming microorganisms such as yeasts, bacteria, and algae to produce bio-identical molecules for the food, cosmetics, pharmaceutical, and materials sectors. The objective is to replace petrochemical or animal-origin processes with more sustainable and efficient production models, which, however, require significant investment in plants, infrastructure, and productive capacity.
The challenge for industrial startups today, Portincaso emphasises in his interview with Bancaforte, is not only technological.
It is, above all, financial, and it concerns Europe's ability to preserve strategic autonomy, industrial resilience, and manufacturing competitiveness in a global context increasingly marked by competition between country systems.
According to the founder of Arsenale Bioyards, capital instruments and credit models need to be developed that can support innovative companies working on building advanced industrial infrastructure, preventing the European competitive gap from continuing to widen.
Mr. Portincaso, what is the main obstacle today for an innovative industrial startup seeking financing?
The problem is structural. We are at a historic juncture where part of the Western industrial infrastructure needs to be rebuilt, but the available financial instruments are not designed to support this change. Today, credit works well for established companies with solid track records or for traditional businesses already integrated into the system. But when it comes to creating something new, the tools are practically nonexistent. This risk, in my opinion, is still underestimated.
If we don’t finance the new industry, we will gradually lose the existing one as well, without having a ready replacement.
What tools is the European market most lacking?
Above all, there is a lack of a culture of asset-backed financing and, more generally, a greater willingness to take on industrial risk. I’m not talking about speculation, but about the ability to finance real productive assets. Today, there is a huge gap between pure venture capital and traditional bank lending. Yet there is a whole segment of innovative companies that are not lightweight software startups, but rather entities that need to build facilities, purchase machinery, and create production capacity. In these cases, however, a tangible industrial asset remains—not something that disappears completely if the project fails.
In the United States, these instruments exist thanks to a much more liquid market, where debt is structured, distributed, and refinanced. In Europe, however, this liquidity is lacking, making it much more difficult to structure transactions of this kind.
How much of an impact does European banking regulation have?
Regulation certainly plays a role, partly due to standards like Basel III and a historically very cautious approach. The problem is that we are currently undergoing a period of profound industrial transformation. And if we fail to understand the historical moment we are living through, we risk ending up with a progressively weakened industrial base, while other national economies move forward much more rapidly.
Is international competition already very evident in your sector?
Absolutely. We are competing with Chinese companies that can rely on a highly coordinated industrial and financial system. In China, regional governments compete with one another to attract new manufacturing hubs, and the banking system supports this industrial strategy very aggressively.
In the United States, on the other hand, the focus is heavily concentrated on technological dominance in artificial intelligence. China has taken a different approach: using artificial intelligence as a lever to transform manufacturing and industrial production. And this difference is clearly evident today in sectors such as electric vehicles and advanced manufacturing.
What risks does Europe face if it doesn’t change its approach?
The risk is permanently losing strategic industrial capacity.
Already today, 70% of global manufacturing output in our sector takes place in China. And this window is rapidly closing. It’s not just an economic issue. It’s a matter of resilience, strategic autonomy, and industrial independence. More and more often, the keys to production chains lie outside Europe. If we do not rebuild our own industrial infrastructure, we risk gradually losing production capacity and strategic expertise.
What, then, should the role of the banking sector be?
Credit is essential. There can be no industrial renaissance without a financial infrastructure to support it. Economic history clearly demonstrates this. If we look at the first American Industrial Revolution, many of those transformations would not have taken place without the financial system’s ability to support long-term industrial investments. Today, of course, the context is different, but the issue of developing tools capable of supporting innovation and advanced manufacturing remains central.
So what is the priority for the future?
We need to build a new capital infrastructure capable of accommodating different risk profiles and supporting the creation of new advanced manufacturing. The tools must be developed, tested, and adapted. There is no ready-made solution, but there is a need to start building it now. Because the challenge does not concern only individual startups or individual industrial sectors. It concerns Europe’s ability to maintain competitiveness, technological autonomy, and productive capacity over time.
Industrial Biotech: AB4S Identifies Key Molecules for Sustainable Manufacturing
From terpenes to functional proteins produced via precision fermentation: the new frontier of industrial biotech lies in molecules increasingly viewed as strategic for building sustainable production chains and reducing Europe’s dependence on global supply chains. This is what emerges from the new report by the international coalition Advanced Biotech for Sustainability (AB4S), of which Arsenale Bioyards is also a member, which identifies four families of priority molecules to accelerate the sector’s industrial development: terpenes, bioactive peptides, functional proteins, and hydroxy acids.
According to the study, the economic potential of the advanced bioeconomy could exceed $1.1 trillion, but transforming this opportunity into actual production capacity requires investments, industrial infrastructure, and new financial instruments capable of supporting large-scale facilities and production.
Source: Bancaforte (innovation key, ABI). Translated from Italian for internal reference. Original headline: Portincaso: "Startup industriali e credito, una sfida comune per la competitività europea".