2017: A year in Swiss corporate venturing (and what it means for 2018)

2017 may mark the year where Swiss corporate venturing became the most prominent source of early-stage capital for Swiss startups, and is well set to continue this trend into 2018. With CHF 156.9 million disclosed funding over 30 deals, corporate venturing funds are actively filling the void caused by insufficient venture capital deals in Series A and B stages. In fact, corporate venturing may be the pillar needed to consolidate a budding, but cautious venture capital industry in Switzerland- and spur the growth of it’s startup ecosystem.

Corporate venturing is nothing new to Switzerland. In fact, it has been a staple of the life sciences industry for decades- reducing the cost of innovation and enhancing R&D life-cycles and commercialization rates. However, Swiss corporates face new challenges- internally and externally. Digitalization, speed to market, global competition, market structures, innovation costs, shifting business models, consumer behaviour and globalization are just some of the factors that are requiring a new approach to how the Giants of Swiss industry approach and absorb innovation. And in the light of changing market structures, business models, technologies and consumer preferences- what better way is there for Goliath to alliance himself with David?

2017 saw the launch of 3 new corporate venturing funds by Swiss companies. In January 2017, Swiss Insurance company Helvetia, in partnership with BtoV, launched a CHF 55 million fund to tap into growing insurtech startups- not only in Switzerland, but across Europe. In May, Swiss Post announced the launch of its own corporate venturing fund- divulging a keen interest to invest in startups that could enhance their digital, e-commerce, financial and communication footprint. And finally, SIX- who underpins the whole of Switzerland’s financial infrastructure launched a CHF 50 million fund in November with the goal of promoting innovation in Switzerland’s financial sector. These new funds add to a growing domestic corporate venturing ecosystem that already includes Swisscom Ventures, Zurcher Kantonalbank, Ringier Ventures, and Tamedia among others.

It remains important to highlight that these corporate investors are not by far the most active corporate venturing funds by Swiss corporates. Pharmaceutical giants such as Novartis, Roche and Merck have pioneered corporate venturing- however, their investments in Swiss startups are negligible, as they continue to actively invest overseas, and in much larger funding rounds (as we shall explore further). This shows a marked difference in innovation and market strategy between these funds- with global players such as Nestle and Novartis actively using corporate venturing as an add-on to their R&D and global market expansion- whilst local players such as Swisscom and Post Finance placing greater importance on domestic service and delivery innovation in Swiss and DACH markets. Whilst this localized venturing strategy correlates more positively with domestic ecosystem-building and positioning, from a purely strategic perspective- it caps access to deal-flow and investment opportunities- and as a result, large exit rounds in their portfolio.

The state of Swiss CV in 2017

In total, Swiss corporate venturing funds invested a disclosed CHF 159.9 million of venture capital across 30 deals that received over CHF 1 million in investment in 2017 (this only includes investments by Swiss CV funds in Swiss startups).

Dealcount CH 2017

The most active investment periods for CVs were in September and November 2017, which coincides with the graduation of Switzerland’s two largest accelerator programs- MassChallenge and Kickstart Accelerator, of whom the majority of Swiss-centered CVs were sponsors- demonstrating that these programs remain an important source of deal-flow for corporate investors.

Financial services as an ecosystem builder

Financial services players have the most active CV funds- representing 35.3% of all investments made in Swiss startups, followed by telecommunications (dominated by Swisscom Ventures) representing 17.6% of deals. Insurance and media CVs each individually represent 8.8% of investors, with pharmaceutical companies, surprisingly, only contributing to 5.9% of corporate venturing. However, when looking at global CV deals made by Swiss corporates, pharmaceutical companies there take the lead contributing to 27.2% of all global corporate venturing investments.

Swiss Investors 2017 industry

It comes as no surprise that players in financial services are highly active, given the relative strength and activity of the fintech sector- and it’s contribution to the evolution of the financial services industry in Switzerland. It is a co-dependent relationship, that best encompasses David collaborating with Goliath, as fintech startups are dependent on large, consolidated banking and insurance firms to successfully penetrate the Swiss market and consumers. In turn, the Goliaths of the Swiss financial industry are discovering that fintech startups considerably accelerate their product and service digitalization efforts- providing new means of reaching consumers, and deploying business models that target a more engaged, digitally native generation of consumers- at a much cheaper cost.

Corporate venturing in the communication’s sector is dominated by Swisscom Ventures, who, alongside Zurcher Kantonalbank was the most active CV fund in 2017- with 6 investments each. Whilst insurance firms such as Helvetia, Swiss Life and Swiss RE only make up 8.8% of CV investments in Switzerland- I believe insurance firms are set to substantially increase their investment activities in 2018, and become highly active investors across insuretech, regtech, and proptech sectors that are gaining in traction.

Swiss CV investor dollar volume

However, some industries are lagging when it comes to introducing corporate venturing. Migros was the only retail investor in 2017, participating in a CHF 4.8 million Series A round for SaaS startup Advertima, with it’s competitor Coop nowhere to be seen. KPMG acquired Terria Mobile for an undisclosed amount, whilst Energie 360 participated in an undisclosed Series A in Zurich-based manufacturing startup Distran, and invested in Berlin-based Volstorage in February. Given the relative strength of the retail and food industry in Switzerland- and one of the best potential exit markets- it is surprising that corporates in this industry are still bearish about the strategic growth benefits of growing a CV portfolio.

Fintech attracts the most deals, but not the most CV money

With financial services firms being the most active corporate investors, it comes as no surprise that fintech startups won in 2017 in terms of deal volume- seeing a total of 5 investments made. SaaS and Medtech startups followed with 3 investments each, followed by IoT and Software which each saw 2 deals.

CV startup sectors CH

However, despite the relatively small number of deals- in terms of dollar volume, Medtech and Pharma startups attracted much larger rounds, totaling CHF 49.4 million and CHF 29 million respectively.

dollorvolumech sectors

Nonetheless, corporate venturing round sizes in SaaS startups are increasing- attracting CHF 12.3 million across 3 investments. Heightened round sizes in SaaS is primarily due to this business model coming of age in the Swiss market. SaaS startups can easily be integrated into a corporates innovation portfolio and product/services delivery strategy- and are most prone to fast growth.

Other sectors that are wetting the appetite of Swiss CVs include healthtech (CHF 13 million), agtech (CHF 13 million) and cybersecurity (CHF 7.2 million). These are sectors which are strongly aligned to the Swiss industrial and corporate fabric, existing resources, and that also benefit from a healthy domestic exit market. Specifically, with the size of the health and agricultural sector in Switzerland, it’s intersection with other industries, and it’s efforts to digitalize- startups launching in this space CV capital readily deploying in 2018.

Corporate venturing fills the Series A and B void


Whilst there is a healthy domestic supply of pre-seed and seed investments among traditional VC funds and business angels in Switzerland- there is a huge gap in early-stage capital, notably Series A and B. This void, is slowly, but surely becoming dominated by corporate investors.

In 2017, Swiss corporate venturing funds invested disclosed capital of CHF 53.4 million across 6 Series A rounds, and CHF 37 million in disclosed capital across 4 Series B rounds. Whilst seed investments still make up 5 deals, this amounted to only CHF 5.3 million in disclosed capital.

This means that the average value of a seed round stands at CHF 1.8 million – in line with CVC trends. However, it is the value of Series A and B rounds that have jumped drastically- and although it remains below the global median of $ 25.26 million dollars- Swiss corporate investors are starting to close the gap with their international counterparts.


As of 2017, the average value of a Series A corporate venturing round in Switzerland (based on disclosed available data) was CHF 7.6 million- and more than doubling to CHF 18.5 million for a Series B. Series C, which saw a deal volume of only 3 rounds, saw a more cautious average of CHF 20.3 million.

This not only tells us early-stage valuations are increasing, but that Swiss corporate venturing funds are competing with traditional VC’s to build their startup investment portfolio- in itself driving prices up. It is also worth noting that on average, CVCs tend to place a higher valuation on startups than traditional VCs- due to the strategic value of their portfolio.

This will place Swiss startups in a dominant position in 2018, where they will be able to negotiate better valuations as traditional and corporate VCs compete for deal-flow in a demand, rather than supply-market. To counter this, corporate investors should consider placing more bets on pre-seed and seed startups- providing them with more strategic access to new technologies and products, and placing themselves in a position where they have preferential terms in further rounds- regardless if the investment is strategic or financial in nature.


So who were the most active Swiss corporate investors in 2017?

In terms of deal volume, Swisscom Ventures and Zurcher Kantonalbank were the most active corporate investors in Swiss startups- each closing 6 deals domestically. Although only launched this year, Swiss Post invested in 3 Swiss startups, as well as closed a seed round with German fintech startup Sonect. Media giant Tamedia, as well as VI Partners- (a corporate investment fund established by McKinsey and ETHZ and funded by Nestle, ABB, ZKB, Credit Suisse, Novartis, Suva, Schindler and Hilti) also each individually racked up 3 investments in Swiss startups, and Merck Ventures follows with 2 investments.

However, in terms of dollar volume (disclosed), the balance shifts.


VI Partners comes out on top, investing CHF 56.5 million domestically, followed by Merck Ventures with CHF 39.5 million. They are followed by Swisscom Ventures and Zurcher Kantonalbank- who invested CHF 19.5 million and CHF 19.9 million respectively. With only 1 investment under their belt, this is followed by Swiss Re, with a Series A deal of CHF 13M in healthtech startup Biovotion.

The strategic investors versus the ‘ecosystem builders’

Understanding the structure of the corporate venturing landscape in Switzerland provides us with singular insights into the investment strategy of these funds. Highly sector-specific and strategic investors such as Merck Ventures and Swiss Re are investing in less deals, but are willing to participate in much larger round sizes- signifying a stronger, short-term strategic value to their portfolio.

On the other-hand, investors such as Swisscom Ventures and ZKB are ecosystem-builders. Whilst they invest in startups that do detain strategic value to their core business, their investment thesis is focused on diversification and ecosystem-building. Startups are the pipeline to testing the market adoption and growth of new technologies and business models- and building the ecosystem around them to maximize future revenue and market share for the industries of the future.

Both investment philosophies are central to building an active corporate venturing environment in Switzerland, and most importantly- building the trust and demand for new technologies and innovations. In fact, the active participation of corporate investors is core to the strengthening of the Swiss startup ecosystem. We cannot negate that the competitive features and innovative fabric of the Swiss economy is based on the strength of our corporates who signal shifts in the market and generate investor confidence- and who are incremental in providing the resources for young Swiss tech firms to grow.

This is why enhanced transparency in valuations and deal sizes are critical- particularly for ecosystem builders to signal the economic and market value of innovations to Swiss industries. Aside from the investment implications for corporate investors, this would increasingly position Switzerland globally as an attractive investment environment for startups- both local and global- in industries of strategic value.

What does this mean for Swiss corporate venturing in 2018?

1. The number of corporates launching strategic venturing arms will continue to increase. As ‘early adopter’ CV funds have demonstrated the strategic and market value of building a startup portfolio, other companies will follow with this trend in more traditional sectors that historically have been less at the forefront of innovation. Specifically, this will be demonstrated by companies that are seeking to quickly diversify, explore new market opportunities, reach new consumers, and better integrate digital technologies into their revenue mix.

2. Swiss startups will gain from higher valuations and round sizes. Whilst the round sizes and valuations are far from reaching the dizzying heights of Silicon Valley, the prevalence and strategic nature of CV investments in Switzerland will drive valuations up- particularly in a market that still lacks disclosure and transparency. Specifically, as CVs are some of the most prevalent investors in early-stage rounds, traditional VCs will be competing for deal-flow as CV’s will be getting in earlier into the venture life-cycle. Given the more strategic, rather than financial nature of CV portfolios, CV funds will increase round values particularly at Series A.

3. Series A and B will continue to be dominated by corporates. As 2017 investments have signaled, corporate venturing arms will continue to dominate Series A and B rounds in Switzerland. Two primary factors will contribute to this trend: most startups at this stage have demonstrated their market potential, and are a less risky investment- having already gone through the accelerator and business angel ladder. Secondly, the relatively small pool of domestic and international VCs in Switzerland investing at early-stage will continue to place corporates in an ideal position to grow their portfolio. However, for more established corporate venturing arms with clear strategic focus, we will see growing interest in pre-seed and seed startups.

4. Increased syndicates with managed funds and traditional VCs. As corporate venturing in some industries is still regarded as a ‘bold and innovative unknown‘, some newly established corporate venturing arms will take baby-steps by investing in existing investor syndicates or managed funds such as offered by BtoV or Investiere (Post Finance, Helvetia, Ringier etc). This provides preferential access to established deal-flow sources, and will be key to enhancing shareholder confidence in venturing activities.

5. Multinationals will start entering the Swiss CV market. Aside from a regulatory and tax regime that works in favour of investment funds, Switzerland can expect some multinationals to launch corporate venturing arms. Our niche technologies, quality of spin-offs (particularly from ETHZ and EPFL), market positioning and valuations will be an attractive source of innovation and R&D.


This article is the 1st part of a 2-part series of Swiss Corporate Venturing in 2017. If you want to stay updated on when the 2nd part will be released, make sure to subscribe to my mailing list on Boudkov.com – reach out to me on Twitter @entrprnrialist or contact me on LinkedIn. If you want to use the analysis, data or charts included- hit me up and ask!

All data in this article was correct as of December 2017. Data was extracted and analyzed from Startupticker.ch, crunchbase.com and the websites of the CV funds included from Jan 2017 to Dec 2017. Note on methodology: Efforts were made to analyze all disclosed investments by Swiss corporate venturing funds into Swiss startups from Jan 2017 until Dec 2017. Investments included in data are only those <$1M and above closed through a dedicated corporate venturing arm. As such, investments made through accelerator programs (such as Kickstarter, MassChallenge, or 3rd party platforms which did not disclose the source of investment were not included).


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s