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A FINANCING DYNAMIC THAT NEEDS TO BE NUANCED IN INTERNATIONAL COMPARISON

The hundreds of millions invested in young technology companies no longer have anything to do with the limited presence of venture capital in the canton less than a decade ago. In some years the growth is spectacular: more than 100%. But how does this situation compare with other innovation locations?

The increase in funding is not unique to Switzerland: it is observed in most European centres, as well as in mature ecosystems such as the Boston area or in Israel. However, growth in the canton is significantly lower than in other regions.


The rate of growth of the amounts irrigating the Zurich ecosystem is more in line with the dynamics of an emerging market than the rate in Vaud, which is lagging even behind mature markets that are already very heavily capitalized, such as the Boston area or, closer to home, the Berlin area. The relatively low number of transactions and this modest momentum compared with other markets can be explained in part by the fact that the region is only now reaching the critical size that would allow it to grow at a higher rate. The large variation in the amounts raised from one year to the next, heavily influenced by a small number of very large towers, supports this hypothesis.

A PERFECTIBLE VOLUME FOR SMALLER TRANSACTIONS

Another frequently asked question is whether the volume of funding is sufficient to support the emergence and growth of projects in the region.

Comparison with other innovation centres provides a partial answer to this question, as long as the amounts are standardised according to the size of the different ecosystems. By focusing on regions rather than countries, a more impartial picture of the hierarchy emerges, since Switzerland is regularly at an advantage in these comparisons due to the small size of its territory, which is highly concentrated around urban university centres. 

From this point of view, the canton does not close the gap and is supported in particular by a large number of large transactions. Contrary to the convictions that prevail among the players in Switzerland, it seems that it is above all at the level of small transactions that the difference is marked compared to the leading group. However, the total still lags significantly behind other innovation centres in Europe and worldwide. That said, being well positioned on very large transactions (over FRF 30 million) must remain an objective, since these transactions have a significant multiplier effect on jobs and corporate growth. 

In the end, while an initial capital density and a slowdown in growth do not point to an immediate catch-up in the global competition for financing, the increase in the number and quality of projects suggests that a virtuous dynamic is potentially being established.

"It's mostly in the smaller transactions that the difference is marked"