Cato co-founders Andrea Zorzetto, left, and Matteo Bossolini Credit: Cato The investment case for Cato is unusual. Most software sells on the promise of making a hard thing easy. Cato’s backers are betting that a hard thing stays hard. The Milan startup has raised €6m in seed funding to sell AI to companies bidding for Italian public tenders.
Keen Venture Partners, the Amsterdam and London firm, led the round. Existing backers Italian Founders Fund, Vento, Heartfelt, Moonstone, BHeroes, Alecla7 and Nova Venture all returned. The founders of Italian legal AI company Lexroom, plus Sibill and Pillar, came in as angels. That takes total funding to €7.6m, less than a year after the two founders started.
Briehan Burke, a general partner at Keen, put the thesis plainly. Public procurement, she said, is one of the last giant unautomated workflows in the European economy. Italy is the right place to start, she added, because it is the hardest country in which to bid. The market, as Italy’s anti-corruption authority counts it The complexity is real, and an unusual referee measures it.
ANAC, the national anti-corruption authority, publishes Italian tender data in an annual report to parliament. Its 2025 edition puts the total value of Italian public contracts at €309.7bn, spread across 287,421 contracts. Value rose 13.9% on the year. The number of procedures rose 7.6%.
Around €20.8bn of the total came from the country’s post-pandemic recovery fund. Across the EU the figure is roughly €2.5tn a year, about 14% of GDP. More than 250,000 contracting authorities spend it. Almost none of the supplier side has software.
Bid teams still read hundreds of pages per tender, check each eligibility clause by hand, and assemble submissions manually. Italy is getting simpler, and that is the risk Here is what the same ANAC report says about complexity, and it cuts the other way. Analogue procedures collapsed from 21% of the total to 1% in two years. The share of contracting authorities using one at least once a year fell from 45% to 1%.
ANAC also cut the number of qualified contracting authorities from more than 20,000 to about 4,000. Its virtual operator file checked around 175,000 companies in 2025 and issued more than four million certifications. That is a state deliberately dismantling the friction Cato sells against. Burke cited 22,000 contracting authorities in Italy when she explained the investment.
ANAC’s own figure for qualified authorities is now roughly 4,000. The two numbers do not measure quite the same thing, but the direction of travel is not in dispute. There is a reasonable answer to this, and it is worth stating. Digitising the buyer does not simplify the seller.
More portals and more structured notices can mean more to monitor, not less. A tender document is still a tender document. Cato tracks more than 27,000 sources, a figure Tech.eu reported alongside the round, and that count does not fall because the state went digital. Where the product is well aimed ANAC’s sector breakdown is the strongest thing in Cato’s favour, and nobody covering the round has mentioned it.
Supplies grew 25.2% by value in 2025. Services grew 15.9%. Works shrank 10.6%. Within supplies, spending on pharmaceutical products jumped 65.4% and on medical equipment 10.1%.
Now look at Cato’s public customer list. It leans heavily medical: MOVI, Kaster Medical Technology, Favero Health Projects, Lionhealth, Respiraire, AHSI and a laboratory supplier. Cato sits in the fastest-growing corner of Italian procurement. That is a better reason to fund it than the complexity argument.
The design choices point the same way. Every claim the system generates links back to a source document. The finished submission stays with the customer. Customer data does not train general-purpose models, and the company holds ISO 27001 certification.
In a bid, an invented eligibility claim is not an embarrassment. It is a disqualification, and possibly worse. Anyone who watched KPMG pull a report over invented claims can see why traceability is the feature. The founders, and the failure Andrea Zorzetto and Matteo Bossolini founded Cato in 2025.
Zorzetto studied public policy and worked inside government in the UK and France. He brought the Plug and Play accelerator to Italy in 2019, founded his first startup in 2023, and announced its failure publicly in April 2025. Three months later he and Bossolini spent a week building a prototype, Startup Reporter wrote in its account of the pre-seed. Bossolini, the technical co-founder, is in his early twenties and had been living between Paris and Berlin.
They incorporated that September and had a paying customer by October. Four of the pre-seed investors had backed the startup that failed. They backed him again. Tech Funding News reported that the earlier company was Peoplerank, a LinkedIn reputation tool.
Cato says it went from 30 customers in April to more than 150 now. What to watch The competition is better funded and elsewhere. Tech Funding News notes that Britain’s Stotles raised a $13m Series A and that Altura, in the Netherlands, closed an €8m Series A. Neither built for Italy specifically.
Cato is betting that national specificity is the moat. That holds until a rival decides Italy is worth localising for. EU-Startups reported two other moves. Cato has hired Luisa Gamba from Amazon Business, where she ran public-sector partnerships in Italy, and it absorbed a smaller company, Avvista.ai, in an acqui-hire during the pre-seed.
Both look like a company buying its way up the learning curve. The Italian context helps. Startups in the country raised €813m across 145 rounds in the first half of 2026, and Milan’s Domyn pulled in over $1bn, mostly in debt. Italy remains one of Europe’s thinnest venture markets per founder.
The number to watch is not the customer count. It is whether ANAC’s simplification programme keeps running. Governments across Europe are rethinking how they buy technology, and Poland has introduced a sovereignty test for state purchases. ANAC meanwhile found that 95% of Italian acquisitions of services and supplies are now direct awards, bunched just under the threshold, with no competition at all.
Direct awards are small tickets. But a market where the state increasingly skips the competition is a market with fewer bids to write.
