Swiss Venture Capital Report 2109, published by the online news portal startupticker.ch in collaboration with the investor association SECA, shows that in 2018 Swiss start-ups received almost CHF 1.24 billion in venture capital across 230 financing rounds.
An increasing number of start-ups are the source of new technologies and business models. Dynamism at the interface of entrepreneurship and science is an important indicator of the long-term growth prospects of a country. For years, Switzerland has lagged behind comparable countries, such as Israel and Sweden, but it is now catching up fast. In 2018, venture capital investment increased by CHF 299 million to more than CHF 1.23 billion, an increase of 32% on 2017.
ICT investment doubles
The strongest growth, at more than 120%, was in investment in companies working on solutions to the challenges of digital transformation of business and society. Last year, 131 Swiss ICT start-ups conducted financing rounds and collected CHF 685 million from domestic and foreign lenders. For the first time, more money was invested in ICT companies than in start-ups in the life sciences sectors – biotech (CHF 253 million), medtech (CHF 123 million) and digital health (CHF 45 million).
Zurich in top 10 in Europe
A glance at the cantonal distribution of investment shows that Vaud has lost its leading position. The new leader is canton Zurich, with 99 start-ups from various sectors raising CHF 515 million in venture capital. Thus, the agglomeration of Zurich was one of the 10 most dynamic locations in Europe in 2018. Google, Alibaba and Porsche investing
Swiss start-ups have struggled for years to raise funds for expansion financing, but a comparison with other European countries shows that it has drawn closer in this area. About 60% of total investment – CHF 688 million – was accounted for by just 20 start-ups. Many of these, including AVA, Nexthink and Climeworks, are on the threshold of international market leadership, which makes them very attractive to the investment arms of well-known companies, such as Google, Alibaba, Porsche, Hyundai, Sony and Airbus.
Four IPOs and a huge deal
Although sentiment on the capital markets deteriorated in the second half of the year, earlier the IPO window was open and four Swiss technology companies seized the opportunity: Sensirion, Medartis, Polyphor and ASmallWorld. In addition, about 20 start-up teams sold their business to a major corporation: the most spectacular deal was the sale of Geneva biotech company Prexton Therapeutics, with a total transaction volume of just under CHF 1 billion.
More than a dozen new funds Thanks to such exits, the venture capital sector has achieved returns in recent years that have out-performed other asset classes. And in 2018, it responded to the fast-growing investor interest with the establishment of more than 12 new funds.