- Local startups are financed with 1.92 billion Swiss francs in the first six months of the current year.
- The number of financing rounds drops for the third time in a row to 339 in the first half of 2023, but remains at a high level.
- Startups from the healthcare sector (life science, biotech) and FinTech/InsurTech generated the most financing volume.
- In the first half of 2023, alternative financing (via crowdfunding or token-based transactions) accounted for around 2% of the total volume invested.
Zurich, 20 July 2023 - Startups in Switzerland again achieved a higher financing volume in the first half of 2023 than in the last six months of the previous year. Over 1.92 billion Swiss francs in financing was generated by local startups (second half of 2022: 1.84 billion francs). This is the third highest level of funding volume since 2015, with only the first half of 2022 and the second half of 2017 achieving higher volumes. At the same time, the number of financing rounds fell for the third time in a row: 471 financings were registered in the first half of 2022, 425 in the second half of 2022, and 339 in the first half of 2023.
It is true that the volumes are not available for all the financing rounds recorded. However, the figures show that the decline mainly affects financings with a smaller volume. In addition, the top 5 startup financings in the first half of 2023 reach a combined volume of CHF 612 million: Haqq Association (Islamic Coin) (CHF 182 million), Distalmotion (CHF 135 million), Noema Pharma (CHF 103 million), GetYourGuide (Debt) (CHF 99 million) and Alentis Therapeutics (Series C) (CHF 96 million). Alexander Schatt, Head Startups & Scale-ups at EY in Switzerland says: "We see an increase in rather large-volume transactions. For this reason, the total volume is increasing compared to 2022, although the number of financings has decreased."
Three of the top 5 startup financings were made in the "Health" sector. This is also reflected in the overall figures for the first half of 2023: Of the total of 339 financings, 96 went to companies in this sector. This is followed by "Software & Analytics" with 83 financings, "Hardware" with 35 financings and "FinTech/InsurTech" with 27 financings. ClimateTech/GreenTech/CleanTech" follows in fifth place with 26 financings.
The aspect of sustainability is also beginning to make itself felt in startup financing: Of the 339 financings, 36 (11%) have a sustainability reference, which means that of the CHF 1.92 billion, around CHF 345 million was invested in such startups (18%).
These are the results of the Startup Barometer Switzerland, published for the first time in Switzerland by the auditing and consulting firm EY.
Alternative financing of startups
In the Startup Barometer Switzerland, new types of fundraising are referred to as alternative financings. On the one hand, this includes token-based financings such as the emis-sion of blockchain-based tokens and, on the other hand, non-token-based financing models such as loans, (government) grants as well as crowdfunding campaigns. Projects based on Non Fungible Tokens (NFT) are not included because they cannot be clearly assigned to Swiss companies.
There has been a significant increase in alternative financing rounds compared with the second half of 2022, and a peak value has been reached: A full 22 alternative financings were realized in the first six months of the current year. Such a high number of alternative financings was last recorded in the second half of 2017. Alternative financing rounds reached a volume of CHF 42 million in the first half of 2023 (second half of 2022: 9 rounds with a volume of CHF 19 million, first half of 2022: 9 rounds with a volume of CHF 14 million). In the first half of 2023, al-ternative financings accounted for 2.2% of the total invested volume. Of the 22 alternative financings recorded, only one was completed with a token-based transaction. Nevertheless, this financing generated a volume of 22.5 million Swiss francs and thus more than half of all alternative financings.
Strong startup regions and the behavior of Swiss investors
A look at the regions of Switzerland reveals a familiar picture: Zurich (140) and French-speaking Switzerland (101) in particular dominate the number of startup financings. Central Switzerland (34), Northwestern Switzerland (24) and the Mittelland (22) follow in the other ranks. However, the ranking shifts when looking at the sums invested: Zurich (CHF 680 million) and French-speaking Switzerland (CHF 499 million) remain in the top ranks. However, northwestern Switzerland has moved up to third place. Although only 24 financings are recorded for this region, they reach a very high volume of CHF 345 million.
For the analysis of investors, only those financing rounds were considered that were made without grants, crowdfunding or debt financing. Swiss investors are involved in 90 of these 184 financings (49%) and exclusively Swiss investors are involved in 25 financings (14%). However, a different picture emerges with regard to the invested volume: In 149 financing rounds, in which all investors are known, Swiss investors only account for 2% of the investment volume. Of the total of CHF 1,278 million, mixed investor groups (46%) and purely foreign investors (52%) contributed the largest share.
In the course of startup financing, it becomes apparent that the share of Swiss investors decreases with several financing rounds. In early financing rounds, Swiss investors account for around 45%, a figure that drops to 19% in later financing rounds. The same applies to the size of the sums invested. Swiss investors account for 47% of financings of less than one million Swiss francs. This share gradually decreases, and for financings of over CHF 50 million, the share of Swiss investors is still 19%.