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EY Startup Barometer Switzerland 2023

Photographic portrait of Alexander Schatt

5 minute read 21 Jul 2023

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Our inaugural study of the Swiss startup scene explores financing trends and analyses the figures by industry, region and investor location.

Download the EY Startup Barometer Switzerland 2023

In brief

Swiss startups are financed with CHF 1.92 billion in the first six months of the current year.
18% of the total capital invested in the first half of 2023 went to a sustainability related company.
In the same period, alternative financing, e.g. via crowdfunding or token-based transactions, accounted for 2% of the total invested volume in Swiss startups.

With its reputation for innovation and ease of doing business, Switzerland is home to a thriving startup scene. The EY Startup Barometer Switzerland shines the spotlight on the financing of startups and scale-ups in Switzerland. This article shares highlights from our more detailed study.

The EY Startup Barometer is published in many European countries on a regular basis. EY is now launching the Swiss version, providing information on the startup scene based on press releases of startups or investors, press coverage, Crunchbase and other relevant sources. EY’s analysis of data from 2016 to the first half of 2023 reveals the number of startups and scale-ups that received financing, and breaks down results by region, industry and source of financing. In addition, the study explores transactions through alternative financing formats, such as token-based financing rounds, grants or crowdfunding platforms.

Financing volume

The amount received by Swiss startups in H1 2023

In the first half of 2023, Swiss startups received almost CHF 2 billion in financing – the third-highest financing volume in the period under review, despite a sharp decline in the number of financing rounds (339 deals compared to 471 in H1 2022). The highest financing volume (CHF 2.3 billion) was recorded in the second half of 2017, when record volumes were influenced with initial coin offerings. In H1 2023, 2% of financing came from alternative financing forms (e.g. token-based, crowdfunding).

Following a slow start to the year, the number of deals and financing volume increased significantly as 2023 got underway. While volumes of less than CHF 150 million were recorded in the first two months of the year, over CHF 300 million in financing was registered in each of the most recent four months. The half-year ended on a high, with the peak transaction volume of the last 12 months achieved in June 2023 (CHF 635 million).

Regional focus

Greater Zurich Area

The amount received by Swiss startups in H1 2023

What about regional differences within Switzerland? Unsurprisingly, in terms of the number of financing rounds, the Greater Zurich Area stands out as the clear leader with 140 deals closed. The Romandie was the only other region to pass the 100-deals mark in the first half 2023. However, both regions recorded a significant decline in financing rounds compared to the first half of 2022. Overall, the number of deals decreased in 6 of the 7 major regions compared to the same period last year. Only Northwest Switzerland saw the same number of financing rounds (24) as in the previous year.

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In terms of financing volume, the Greater Zurich Area was also the strongest performer, albeit at a lower level than in the first half of 2022, securing CHF 680 million in financing in the first six months of 2023 compared to CHF 1.1 billion in the same period of 2022. By contrast, start-ups in Romandie, Northwest and Central Switzerland achieved higher total financing volumes than in the same period in 2022.

Industry focus

The analysis also revealed striking differences in financing volumes and rounds between different industries. Five sectors each recorded inflows of more than CHF 100 million in the first half of 2023: Health (CHF 721 million), FinTech/InsurTech (CHF 486 million), Software & Analytics (CHF 305 million), Hardware (CHF 128 million) and Mobility (CHF 111 million).

The Health sector was also the leading industry in terms of financing rounds: a total of 96 deals were recorded in the first half of the year, equivalent to 28% of all deals in the first half of 2023. Software & Analytics accounted for a total of 83 deals and 24% of all financing rounds, respectively. With SaaS, artificial intelligence, virtual reality, blockchain, cloud, cyber security and data analytics, this sector includes startups focused on new technologies. The top five in terms of deal number mainly reflects the list for volume, but includes ClimateTech/GreenTech/CleanTech (26 deals), pushing mobility into sixth place.

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The number of larger deals (over CHF 10 million) was almost unchanged on the previous year – but there were significantly fewer smaller deals. In the first half of 2023, 32 deals with a volume of more than CHF 10 million were recorded, just one deal more than in the same period of the previous year. In the same period, a total of 213 smaller deals (below CHF 10 million) were counted, compared to 350 deals in the same period of the previous year. It is this drop in smaller deals that accounts for the overall year-on-year fall in financing volume.

Sustainability focus

We see the general sustainability trend reflected in the strong performance of the ClimateTech/GreenTech/CleanTech industry in the first half of 2023, but what does a deep-dive into the deals reveal? Just 36 of the total of 339 registered financing rounds had a reference to the cross-cutting issue of sustainability.

Supporting sustainability

Share of total capital invested in sustainability-related startup projects.

However, in terms of financing volume, sustainability had a bigger impact. The cumulative volume of deals related to sustainability totaled CHF 345 million, equivalent to 18% of the total capital invested in the first half of 2023. In other words, one in five Swiss francs invested in a startup went to a sustainability related project.

Investor focus

Who’s behind financing of startups in Switzerland? For our analysis, we excluded grants, crowdfunding and debt financing, leaving 184 deals. Of those, Swiss-based investors were involved in almost half of the transactions (90) in the first half of 2023. At least 25 financing rounds (14%) involved exclusively domestic investors, compared to 59 deals financed exclusively by foreign investor groups.

In 35 of the 184 deals that were considered in our analysis, no investor information was disclosed. A total of (at least) 456 investors were involved in the remaining 153 financing rounds in which the investors were known. Swiss investors were the most numerous, followed by those from the US, Germany and the United Kingdom.

In terms of volume, pure Swiss investors accounted only for a marginal 2% (CHF 31.5 million) of invested capital. In contrast, as much as CHF 935 million (60 percent) came from investor groups where all investors are headquartered abroad. The remaining CHF 588 million (38%) was provided by mixed investor groups in which the investors come from both Switzerland and abroad. At least seven of the 10 largest financing rounds in the first half of 2023 took place without participation of Swiss investors. In addition, the share of Swiss investors decreases as the size of transaction increases.

Download the EY Startup Barometer Switzerland to browse our results in full and discover which companies were involved in key deals in Switzerland in the first half of 2023:

Summary

Our analysis of the Swiss startup market paints a picture of an attractive location for investors, especially from abroad. In the first half of 2023, the share of Swiss investors decreases as the size of transaction increases. Startups from the Health sector (e.g. life science, biotech) and FinTech/InsurTech generated the most financing volume in the first six months. It will be interesting to see how the trend toward new forms of financing (e.g. crowdfunding, tokens) develops over the course of 2023.

About this article

Photographic portrait of Alexander Schatt

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EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Limited, each of which is a separate legal entity. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland.