

The Swiss Venture Capital Report is published at the beginning of the year, which deals in depth with the financing in the startup area of last year. Capital rounds and exits are commented and summarized. This gives a good picture of the Swiss venture capital market.
Facts and figures
In 2019, almost CHF 2.3 billion was invested in Swiss startups, an increase of around 86% compared to the previous year. 266 startups benefited from this. While the volume has almost doubled, the number of capital rounds rose by only 16%. This is due to the few, but larger, financings, since the 20 largest deals represent around 71% of the total investment volume. The focus remains on the ICT and FinTech industry with its geographical center of Zurich. Their volume almost double that of the two most important area, biotech.
Fortunately, investments in private equity are increasingly becoming the focus of investors in times of negative interest rates. Historical returns of 8-15% are shown here, whereby of course it depends very much on the respective investment strategy. A successful exit, i.e. a sale / IPO of the company, may have a very positive impact on an entire portfolio. Despite the gratifyingly strong growth, it is a pity that the investments are increasingly concentrated on a few, large companies. We believe that these are not necessarily the investments that promise the most success, as the examples Uber or WeWork impressively show or have shown.
Personal opinion and assessment of the author
Building a FinTech company is very capital intensive. We have developed Crowd4Cash with comparatively small financing rounds to one of the larger Crowdlending platforms in Switzerland. Despite several unique selling points, we are still dependent on investors. Thanks to our rigorous cost management, however, we are in the comfortable situation of burning less money than many other FinTechs on the market. In this way, we also retain a good deal of independence. Although the inclined reader would not see any obstacles under these conditions, it is still difficult for us to raise capital for further growth. We are well financed, but still see a lot of potential (internationalization) lying idle, which we cannot raise at the moment because the financial means for this are lacking.
We see certain inefficiencies in the market because a relatively large amount of capital is invested in the extremely early stage or, as shown in the Swiss Venture Capital Report, in the later stage for larger rounds. In between, however, lies a lot of unused potential. Within the scope of the self-imposed goal to promote SMEs and young companies, we see among others, also Switzerland's economic policy in charge. Despite fundamentally commendable efforts such as the Swiss Enterpreneur Fund, this gap is not closed. Instead of investing in cost-conscious companies that act cautiously and sustainably in the early growth phase, investments are also made in more mature and larger companies here (focus of investments is CHF 5-20 million). It is precisely the young companies that handle their financial resources sensibly from the start that have great economic potential, also for the future. It's just a shame that these companies have to take longer than necessary to achieve success and sustainable profitability.
Note: This is a personal assessment of the author and does not necessarily reflect the company's view.