Successful startups in the fields of forward-looking technologies represent the innovative strength and competitiveness of a location. 2019 was a record year for the vibrant and diverse startup scene in Switzerland.
Rise of the Swiss unicorns
Never before were so many startups founded, and never before had so much been invested in startups as in 2019. In fact, nearly CHF 2.3 billion or over a billion more than in the previous year was invested (source: Swiss Venture Capital Report 2020). At least five privately held startups reached the prestigious "unicorn" status with a valuation of over one billion US dollars, including four from Greater Zurich: GetYourGuide (travel platform), Wefox (insurance marketplace), Numbrs (banking app) and Acronis (cybersecurity). Interestingly, the technology fields in which the most investment was made – information technology and biotech - are the same ones from which Greater Zurich Area Ltd (GZA) registered the most business settlements. This highlights the quality and dynamic of our region in these ecosystems.
Innovation and business-friendly environment
The three most important ingredients for a thriving startup ecosystem are talent, capital and customers. In addition, there are leading universities, renowned companies, mentors, incubators and accelerators, innovation support programs, associations and special events. An innovation and business-friendly environment and a sense of entrepreneurial spirit round off the package. Greater Zurich has developed into a very attractive location for successful startups.
Relevance for the location and its promotion
Most foreign companies settling in Greater Zurich are no longer startups but are already one step further in their business development. Local startups, on the other hand, are very important for GZA's location promotion: they show the technological excellence of our economic region in a credible way. GZA often connects companies interested in settling in the region with local startups. Having successful startups is also extremely important for our economic region in the long run - to ensure that Greater Zurich and Switzerland remain innovative and competitive in the future.
Insights from Stefan Steiner, Co-Managing Director at Venturelab
What's a startup?
A startup is a technology company that is usually not older than five years. It must have an innovative, globally scalable business idea.
Venturelab has been supporting startups for over 15 years. How has the ecosystem changed during this time?
The scene was much smaller then. University graduates wanted a job in consulting or at a bank, and I was the only one in my graduating class who was interested in startups. Today, graduates are motivated by successful founders and therefore much more interested in starting their own business. In addition, risk capital, and especially venture capital, can be found easily in Switzerland today. Almost on a weekly basis, one reads about larger financing rounds of CHF 10-20 million. Finally, a network of founders has emerged: Entrepreneurs who sold their company invest their knowledge, their network and their capital in the next generation of startups.
Why is Greater Zurich attractive for young tech companies?
Startups are looking for three key assets: capital, customers and talent. Zurich is very attractive in all three. In addition to attractive financing opportunities, there are also many interesting customers from various industries for startups. Those who can win a customer with a high reputation will find it easier to convince other customers and investors. The main pillars not only of the startup, but of the entire innovation ecosystem are the world-class universities ETH Zurich and the University of Zurich, but also universities of applied sciences such as the University of Applied Sciences Winterthur, the University of Applied Sciences Rapperswil or the University of Applied Sciences Northwestern Switzerland.
In which fields of technology are we global leaders?
In general, wherever real technology expertise is required. In the much-hyped Berlin, you'll find more low-tech areas such as e-commerce or social media, while in Zurich you'll find specialized high-tech areas such as artificial intelligence, machine learning, computer vision or drones. Universities, talents, large tech groups and startups join forces to create world-leading ecosystems. Biotech, medical technology, fintech and, increasingly, cleantech are also strongly represented among the leading Swiss startups.
What could be improved?
A major challenge remains the fact that permits for employees from third countries are too scarce. It's unfortunate when we train talented people at our universities and they have to leave Switzerland because they do not receive a work permit. In addition, there is also the problem of employee profit-sharing, which has not yet been satisfactorily resolved from a tax perspective.
Since 2004, Venturelab designs and operates flagship startup programs such as Venture Kick, Venture Leaders, TOP 100 Swiss Startup Award, Innosuisse Startup Trainings to support the best entrepreneurial talents. Together with successful founders, leading academic and industry partners, Venturelab brings the best startups to success.
Investments break new record
With growth of more than 80% since 2012, investments in Swiss startups have now exceeded the CHF 2 billion mark. This is due to several large financing rounds of over CHF 100 million and a clear increase in investments in almost all sectors and funding stages.