Italy Venture Capitalist Bucked Mamma's Advice, Made Bet on Lyft

(Bloomberg) -- Italians love their coffee, and they listen to their Mammas, so a Milan entrepreneur’s decision to sell the family espresso machine company, launch a venture capital firm and bet on a U.S. startup -- against his mom’s wishes -- was a bold move.

To be sure, when Luca Rancilio decided to get out of professional coffee equipment and set up VC firm Rancilio Cube in 2013, he was essentially swapping one family business for another. The 15 million-euro ($17 billion) fund is an all-Rancilio affair, with key roles for sister Silvia and 80 year-old mother Adele, who Luca jokes is “the oldest venture capitalist in Europe.”

With a long entrepreneurial background, the shift into venture capital wasn’t a huge leap for the Rancilio family. But getting the clan onboard for the firm’s biggest bet so far required a bit of salesmanship.

When 48 year-old Luca pitched an investment in ride-hailing company Lyft in 2015, family matriarch Adele was unimpressed. “Calling for rides by smart phone is just crazy,” the grandmother of two said -- sealing Luca’s conviction that the idea was perfect for Italian millennials.

Initial Bet

The family eventually came around, and San Francisco-based Lyft now accounts for about 10 percent of Rancilio’s 89 investments. The initial 1 million-euro bet made Rancilio Cube Lyft’s only Italian direct investor prior to its March listing.

While some analysts have echoed Mamma Adele’s concerns about Lyft, saying the stock’s valuation is based on overly optimistic views of when millennials will start giving up on car ownership, Luca remains bullish.

"We have a six-month lock-up, but I believe strongly in Lyft," he said. The fund bought in at $29 per share, compared with the company’s initial public offering price of $72, which matches Thursday’s closing.

Rancilio Cube’s other startup investments, many in the U.S., are spread across industries including banking (German mobile bank N26), retail (Lyst) and the “sharing economy” (Uber, Airbnb). The fund plans to continue adding investments in about 10 companies a year to its portfolio, according to Luca Rancilio.

While the Lyft listing has put Rancilio in the spotlight for the first time, 48 year-old Luca says he’s most proud of his firm’s investment in reforestation company Treedom. The Italian company, which allows customers to plant trees at the click of a mouse and follow them online, “totally fits my strategy,” he said.

Still, Luca is quick to note that Cube is interested in all kinds of investments, not just trendy picks like Treedom or Lyft. The firm also has about 20 million euros of more traditional holdings, including bonds.

To contact the reporters on this story: Chiara Albanese in Rome at calbanese10@bloomberg.net;Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Jerrold Colten, Giles Turner

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