CHF 2.6 billion for Swiss start-ups

In 2023, the downturn on the global venture capital market reached Switzerland. The causes were the same as in the US, the UK, Germany and the Scandinavian countries: first, rising interest rates slowed the influx of funds from institutional investors, asset managers, family offices and private individuals, and, second, general economic uncertainty caused venture capitalists to hold back on new commitments and reserve money for companies in which they were already invested. Overall, these factors led to the first year with a marked decline in venture capital investment since the financial crisis of 2008/2009.

Swiss start-ups received a total of CHF 2.6 billion last year, 35% less than in 2022. Start-ups in the growth phase were particularly affected by the decline: the 20 largest financing rounds totalled CHF 1.4 billion in 2023, compared with CHF 2.6 billion in the previous year. In contrast, the number of financing rounds rose slightly from 383 to 397.

The sector breakdown shows that start-ups from the ICT and fintech sectors in particular had a hard time raising money in 2023: according to Swiss Venture Capital Report, investments fell by more than 60% to CHF 786 million, while investment in biotech and medtech start-ups rose by 22% to CHF 492 million and 41% to a record CHF 379 million, respectively. 

Fewer exits

Sales of young Swiss technology companies to large industry-related companies from Switzerland and abroad also declined in 2023. A total of 67 venture capital-financed start-ups found new owners in 2022, but only 38 did so in 2023. The sales of Zug-based fintech start-up nChain and Basel biotech company T3 Pharmaceuticals each had a transaction volume of about CHF 0.5 billion.

Confident investors

“Last year was unprecedented,” says Thomas Heimann, start-up manager at industry association SECA. However, the results of the report’s annual investor survey suggest that financing activity will pick up again in 2024, at least in terms of influx of funds. A good 50 Swiss venture capital firms are currently raising money for new funds. And as at 1 January 2024, about half of investment vehicles already had the finance in place for their initial investment.

The Swiss Venture Capital Report can be downloaded in the assets section. 

The press release can be downloaded below.

(SK / JD)