Crowdinvesting becomes a viable option in Switzerland

13.02.2019 15:30

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Crowdfunding

Swiss start-ups that tried to sell shares to the crowd experienced difficulties in the past years. Now start-ups dare to give crowdinvesting another try and are successful.

Usually, crowdfunding rounds are quite small and start-ups are using them to offer new products for a subscription. This might be the most popular form of crowdfunding, however, it is not the only one. In crowdinvesting campaigns, start-ups offer shares, participation certificates or similar to fund capital expenses, such as purchasing equipment. The amount raised in via crowdinvesting is usually higher than in ordinary crowdfunding campaigns. In the past years, a few Swiss start-ups started crowdinvesting campaigns, however, without much success. Last October, SoFlow’s successful crowdinvesting campaign was a clear indicaion that the wind has started to blow from another direction. Three new examples confirm the trend.

WeGaw seeks to launch its terrain technology product
WeGaw processes satellite and ground data to give Digital Outdoors platforms and Tourism Offices daily terrain status and risk alerts so that their users safely enjoy outdoors. Using six different satellites from ESA and NASA, ground stations and machine learning, WeGaw provides a daily delivered outdoors monitoring service called DeFROST. The startup has already attracted three pilot users worldwide while other four willing to join.

DeFROST has undergone intense research and development and is now ready for market entry. To finance this stage, the startup launched a crowdfunding campaign on Seedrs seeking for €201’600 for 9.24% of equity. Today, the startup has raised more than €260’000 for over 11.75% equity. More than 312 investors have contributed to this funding success. The funds will aid growth and further development of DeFROST.

Swisspeers platform seeks funds for product expansion
Swisspeers is a crowdlending platform through which SME companies can raise loans directly from private and institutional investors. The platform embodies a technology to facilitate automated information processing and loan auctioning in an investor-friendly manner.

Since the go-live in June 2016, the platform has successfully funded 180 projects from 25 industries with a total funding volume of CHF 28million. More than 1000 investors have contributed to this success.

Building on this success, the startup is now aiming for further growth and expansion of its product offering. To achieve this, it has launched a crowdfunding campaign on its platform. To-date, Swisspeers has raised some CHF 500’000. Swisspeers is offering investors participation certificates (non-voting shares) in exchange for their contribution, which gives them the opportunity to become part of the company’s growth journey and evaluation. Moreover, backers will have the opportunity to earn dividends along the journey once the company goes breakeven.

The company plans to invest the raised funds in new products and marketing activities. The campaign is open exclusively to its customers until this summer. 

Venture Debt: €850’000 for Edamama
Food start-up Edamama chose a slightly different approach with a “venture debt” crowdfunding campaign on Seedmatch. The investors receive a fixed interest rate of 8% semi-annually; in addition, a turnover-dependent bonus interest rate of between 10 and a maximum of 30% at the end of the contract. In less than two weeks backers committed €850’000. The funds will be used to finance the next growth steps. Edamama introduced a new assortment of beans-based pasta, allowing everyone to enjoy quick, healthy meals. 100 grams of Edamama’s pasta provide 45 grams, 20 grams fiber and only 7 grams of carbohydrates. Since the start, the company has sold over 500,000 packs of pasta, generated more than €2 million in sales and attracted more than 25,000 online customers.

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