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Swiss VC investments at record high thanks to crypto startups

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Crypto Startups Push Swiss VC Investments to a Record copy

Venture capital investment in Switzerland reached a record high last year, with cryptocurrency companies playing a significant role in this achievement.

Crypto startups attract huge investments in Switzerland

Swiss VC investments reached a record high of 1.25 billion USD last year thanks to cryptocurrency startups. Zug, which is home to Switzerland’s Crypto Valley has attracted huge investment volume according to this year’s edition of the Swiss Venture Capital Report.

The report was published by the news outlet Startupticker.ch and the Swiss Private Equity and Corporate Finance Association (SECA) after they looked into venture capital investments of at least 100,000 Swiss francs.

Startups in the country receive roughly 1.25 billion USD from venture capitals, which represents a 32 percent increase from the previous year. The report revealed that the number of financing rounds has surged by more than 31 percent to reach 230 in 2018.

The Information and Communications Technology (ICT) sector which includes the fintech sector was mostly responsible for this growth. ICT startups experienced a 124 percent increase in investments over the past 12 months. Last year, 131 Swiss ICT startups carried out 60 percent of all funding rounds, the report added. They amassed 685 million francs from investors, representing 55 percent of the total invested capital last year.

The fintech sector which includes crypto companies raised 15 percent of the total capital, amounting to 188 million francs. In addition to that, six of the ten largest funding rounds were conducted by ICT firms, with the leading three being SEBA Crypto, Nexthink and Way Ray.

SEBA Crypto, the Zug-based company, raised the largest amount last year, in the tune of 100 million francs. The company works on a project aiming to combine the crypto and traditional banking services.

The report added that ICT had become the largest venture capital sector in the country, ahead of biotech and MedTech. The presence of VCs such as Index Ventures and GV, the venture capital arm of Google’s parent company Alphabet was crucial to the growth of the ICT sector.

Zug remains a very attractive region for investors

The report looked into the geographical distribution of venture capital investments. Zurich was the leading city regarding VC investments in the country. Ninety-nine startups in different sectors in the city raised roughly 500 million francs last year.

Zug and Basel-Stadt are two other cantons that experienced massive investment growth in 2018. Startups in Basel-Stadt saw investment rise by 73 percent compared to the previous year. In Zug meanwhile, startups saw a 143 percent increase in investment over the past 12 months. The report added that fintech businesses raised over 60 percent of risk capital in Zug.

Swiss crypto scene remains optimistic

The report concluded that the crypto sector in Switzerland is entering a period of normalization and professionalization, thanks to the regulatory efforts by the government. Switzerland has become a leading crypto-friendly jurisdiction in Europe and has recently implemented a comprehensive strategy for the development sector.

The Swiss Financial Market Supervisory Authority (FINMA) put together guidelines for businesses operating with crypto assets. The clear definition of ICO and other crypto terms has led to transparency and legal certainty that benefits crypto companies and their investors.

The number of ICOs in the country and their value has dropped significantly over the past 12 months. This shows that the crypto gold rush is over. Despite that, “there is no question of a hangover,” according to Mathias Ruch, board member of the Swiss Blockchain Federation and co-founder of Zug-based investment firm CVVC.

CVVC in its recent report revealed that the number of businesses operating from Zug has increased by 750 despite the crypto prices still down. Ruch believes that Switzerland should embrace the return of common sense in the crypto sector. He added that now would be the best time for the country to build on its technical and regulatory leadership.


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