News that investment
in Swiss start-ups has smashed the 1 billion franc mark will come as no
surprise to those who have been involved in angel and VC investing in the
confederation over the last year: momentum has been building both on the
entrepreneurial side and the financial.
The latest Swiss Venture Capital Report from Startupticker shows
that CHF 1.24 billion flowed into Swiss start-ups in 2018, with each side playing its
part in the 31.8% jump in investment.
The money came through
a variety of investors: from local business angel groups and experienced Swiss
VC funds to big name international investors and billionaires, an ecosystem is
building to service the growing number of high-quality businesses with a unique
selling point and strong entrepreneurial teams.
editor in chief, Stefan Kyora said: “In order for a
start-up scene to develop its own momentum, it needs not only ambitious
founders with promising projects, but also investors, financing for their
funds, and established companies that are willing to work together with
start-ups and ultimately take them over. Over the past year, there has
been significant progress in all these areas.”
Although ICT and
Fintech made the biggest gains, together accounting for 55% of the investment,
Switzerland showed a relatively balanced spreads across sectors in comparison
to European peers: in France, 70% of start-up investment went to ITC alone. At
35% of start-up investment, the Swiss biotech sector in particular provides a
strong counter point to the relentless rise of IT solutions and fintech.
ICT companies did,
however, take the top three spots among the largest deals of 2018, and made up
half of the top 20, with SEBA Crypto’s CHF 100m funding round leading the pack.
which wants to combine online and bricks and mortar
retail in order to cater to all possible user requirements for crypto and
traditional banking services, was
backed by BlackRiver Asset Management, Summer Capital, and several private
It was notable,
however, that the number of funding deals grew at almost the same rate as the
funding itself. In what the report’s authors called a sign of the “increasing maturity of the ecosystem”, the top 20 rounds contributed only 56% of the
volume – five years ago, it was 82%. The report tracked funding deals over CHF 100,000, and found that there
were 230 last year – up by 31.4% on 2017.
explosion in innovation and a growing start-up culture in Swiss cities such as
Zurich, Zug and Basel, investors of all sizes are feeling emboldened by the
level of impressive exits seen on the international stage. Ten-year-old Swedish
firm Spotify ended its first day on the market with a $26,5bn valuation, but
this was just the tip of the unicorn’s horn: more $1bn companies are being
created in Europe than ever before.
Thomas Heimann and Maurice Pedergnana, co-authors of the Swiss Venture
Capital Report, said: “Success stories such as exits
and IPOs act as catalysts. Europe is becoming more attractive as a venture
capital location and is catching up with the US.”
They point out that Switzerland is creating
the kind of disruptive “deep-tech” that is attractive to investors, while
valuations and the quality of prospects in Europe are looking attractive to
Asian and US funds. A positive cycle is therefore being created for local
investors at the earlier stage too: With the supply of
new fund vehicles investing in both earlier and later stages, follow-on financing
in Switzerland is becoming more likely to produce a successful product in the market and investors in
earlier rounds are more likely to take the investment risk as there is a better prospect of
finding a strong late-stage financial partner.
Heimann added: “Even though Switzerland is not yet a
unicorn factory, the largest rounds of financing are certainly impressive in
comparison with Europe.”