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Swiss Economic Forum: Swiss startups often fail because of money – News

Swiss Economic Forum: Swiss startups often fail because of money – News

When Swiss startups want to grow, they often do not have the necessary funds. A new institution with ambitious goals.

Florian Gutzweiler can be proud: his startup Voliro, which is developing drones for operating at heights, has won the SEF Award at the Swiss Economic Forum. It is a moment of success that does not hide the difficulties faced by the promising young company in its search for capital in Switzerland.

“I think it's difficult everywhere,” Gutzweiler says. But: “Switzerland is inherently risk-averse, and this certainly also applies to the investor landscape.” Volero has recently achieved success abroad: a German investor invested ten million francs.

35 percent less money than last year

In Switzerland, the dream of a successful startup fails not necessarily because of the quality of the ideas, but often because of the money. Following strong growth in investments in Swiss startups over the past few years, figures from the Swiss Venture Capital Report show that it will be significantly more difficult for Swiss startups to raise money in 2023.

This is due to general economic uncertainty, which has also led to a decrease in funds allocated to startups in other countries. Investments in startups in this country collapsed by 35 percent in 2023 compared to the previous year. According to the report's authors, there is no sign of recovery for the current year either.

In Switzerland, early-stage startups can still get money quite easily, explains Raphael Tobler, president of the Swiss Startup Association – but the problems come later.

“Once you need more money, five, ten, 20 or 30 million, which is necessary in some industries, it becomes very difficult in Switzerland. Then you go abroad, to England and America, and the startups often move away,” says Tobler. About Switzerland.

To combat this, Swisscom and UBS founded Deep Tech Nation Switzerland. The program aims to improve the framework conditions for startups and investors and mobilize 50 billion francs for high-tech startups over the next ten years.

This amount corresponds to a doubling of investments in Swiss startups compared to last year. The startup scene is welcoming the initiative – despite the seemingly ambitious goals. “It's a huge number. “Even if you manage only half of it, you have done a lot for the ecosystem,” says Rafael Tobler.

The next round of funding is about $20 to $30 million. Larger foreign investors usually have priority and make decisions more quickly.

Florian Gutzweiler from Volero is already thinking about the next round of financing. He remains cautious about the chances of finding something in Switzerland. “We will always look to Switzerland,” says the young businessman. But the next financing rounds will be in the range of 20 to 30 million. Larger foreign investors usually have priority and make faster decisions.