He Failed Once. Then He Raised €1.6M in Weeks. Meet Cato, the AI Rewriting Italian Public Procurement

A CEO who came back from public failure, a 23-year-old CTO who almost never returned to Italy, and a €500 billion market nobody in the startup world talks about. This is the story of Cato.

The market hiding in plain sight

Every year, Italian public institutions — hospitals, schools, municipalities, national infrastructure bodies — spend roughly €500 billion buying goods and services. That is approximately 20% of Italian GDP, and it flows through a process called public procurement: competitive tenders that any qualifying company can bid for.

Think about it differently: around one-third of your taxes are spent through these tenders. The asphalt on your street, the medical devices in your hospital, the IT systems in your school — all procured through gare d’appalto.

Yet the companies competing for these contracts are doing it almost entirely by hand. Thousands of tenders are published every day across dozens of platforms. Hundreds of pages of documentation per bid. Strict legal compliance requirements. Dedicated “uffici gara” — bid teams — spending most of their working hours on document management, not on writing compelling offers.

Until very recently, none of this could be meaningfully automated. The work was too complex, too document-heavy, too Italian-specific. Then the AI moment arrived — and a 26-year-old founder who had just publicly announced his first startup’s failure looked at this market and saw an opportunity.

Three months from failure to €1.6M raised

Andrea Zorzetto has lived a compressed version of the founder journey. At 24, he brought Plug and Play — one of the world’s most active startup accelerators — to Italy. Years of living abroad followed, across London, Paris, Berlin, Washington, and Hong Kong, studying public policy and working inside ministries in the UK and France.

In 2023, he founded his first startup. In April 2025, he announced his failure. It was a public post, honest and direct — the kind that most founders avoid writing.

Three months later, he was reading about AI startups tackling public procurement in the United States. His background snapped into focus: public policy degree, government advisory experience, deep familiarity with how procurement works at the institutional level. “This is mine to build,” he thought.

Around the same time, through Elisa Biava at Heartfelt — a Berlin-based pre-seed fund investing across Europe — he met Matteo Bossolini. Matteo was 22, had been programming since he was 12, founded his first startup at 17, and was splitting his time between Paris and Berlin. He had a client in the AI space who needed exactly what Andrea had in mind: an AI for public tenders.

They spent one week working together as an experiment in late June 2025. They never stopped.

Cato was incorporated on 26 September. Their first paying client came aboard in October. By December, they had closed a €1.6 million pre-seed round. By the end of Q1 2026, they had tripled their client base from 11 to over 35.

What Cato actually does

Cato is an AI-native platform that automates the full procurement cycle for companies selling to the Italian public administration. The keyword is native: this is not a layer of AI added onto existing software. The entire workflow is redesigned around AI agents.

In practical terms, this means:

• Automatically filtering relevant tender opportunities from thousands published daily
• Extracting and summarising requirements from dense legal documents
• Drafting bid documents based on the company’s past submissions
• Auto-compiling administrative forms that previously required hours of manual work

The system improves over time: each processed tender makes the next one faster, more accurate, and more tailored to the client’s profile. What previously took a bid team days of work now takes minutes.

Cato describes itself as one of the most “AI-intensive” startups in Italy by token consumption — a reflection of just how deeply the product leans into language models to handle complex, document-heavy workflows. The platform was built in close collaboration with some of the best bid teams in the country, which means it is calibrated to how real Uffici gara actually work, not how outsiders imagine they do.

Current clients span healthcare (medical devices, pharmaceuticals), education, IT procurement, and infrastructure — sectors where public contracts are both large and recurring.

The round: when investors back a founder twice

The €1.6 million pre-seed was led by IFF, with Irene Mingozzi joining Cato’s board. The syndicate includes Heartfelt, Vento, Moonstone, BHeroes, Alecla7, Nova, and more than 20 angel investors — including several prominent Italian founders.

What is notable: four of these investors — Heartfelt, Vento, Moonstone, and BHeroes — had previously backed Andrea’s first startup, the one that failed. They chose to back him again. That kind of investor conviction in a second-time founder, especially after a public failure, says something meaningful about how the Italian ecosystem has matured.

“When I brought Plug and Play to Italy in 2019, significant pre-seed rounds were rare,”

says Andrea Zorzetto. “Today they are more common — but raising this much capital just weeks after founding remains unusual. Public procurement has enormous weight in our economy, and for the first time, AI can change it radically.”

A team that came back to Italy on purpose

The Cato team is 12 people, all between 20 and 32 years old. Some have years of hands-on experience in procurement; others come from AI and LLM development backgrounds. Several have returned from abroad specifically to join this project, which in the Italian context is not something to take for granted.

One team member had been managing a team of 10 at a Series B company in Barcelona. Another — Matteo himself — had been between Paris and Berlin with no plans to return to Italy. “I never thought I’d come back to build something here,” he has said. And yet here he is, as CTO and co-founder of one of the more interesting AI bets in the Italian market right now.

The team describes itself as tight-knit and genuinely enjoying the work, which, for a company that has gone from zero to 35 clients in under six months, is probably one of the less-celebrated but most important ingredients.

What comes next

The stated goal for this round is to grow from roughly 35 clients to 100, validating both market fit and unit economics before a larger raise. The funds are going towards team building (experts in procurement, AI, and growth) and product development.

The challenge ahead is real: public procurement in Italy is enormous but fragmented, spanning dozens of sectors with different rules, different buyer profiles, and adjacent markets (insurance, legal compliance, certification) that all sit within the same ecosystem. Growing fast means being extremely deliberate about where to focus.

The market, though, is undeniably there. Tens of thousands of Italian SMEs and mid-market companies compete for public contracts with no modern tooling. The first AI platform that earns its trust — and keeps winning its renewals — has a very large runway in front of it.