Swiss start-ups struggle to find the funding needed to scale

Swiss founders are returning to Zurich, but the money to scale remains harder to find. Clara Lepsius and Ben Chen, both ETH graduates, built their infant-nutrition venture Aluere after meeting during their studies and research work in the United States. They had the option of developing the company near Boston or in Silicon Valley, where start-ups can draw on much larger pools of venture capital. They chose Switzerland.\n\nTheir decision reflects the continuing appeal of the Swiss research and business environment. ETH Zurich supplies technical talent, laboratories and a growing network for commercialising scientific work. The country also offers proximity to major European markets and a reputation for precision in engineering and science.\n\nThe difficulty emerges when a young company moves from proof of concept to expansion. Product development, regulatory approval, international sales and manufacturing require capital on a different scale from an initial seed round. Swiss start-ups can attract early interest, yet often face a thinner market when they need investors prepared to finance rapid growth.\n\nThat funding gap matters beyond individual companies. If promising businesses relocate or sell abroad before they mature, Switzerland can lose intellectual property, high-value jobs and the economic benefits generated by its universities.

The capital shortage is structural, according to venture policy specialist Ashwin Lalendran. The co-founder of IndustriousAF, a nonprofit working with policymakers and funders, said the difference between Switzerland and the United States cannot be explained by entrepreneurial culture alone.\n\n“The gap is capital, and it is structural rather than cultural,” Lalendran said. “You cannot build a frontier AI company on Swiss-sized rounds.” His assessment applies across sectors in which research-intensive companies must spend heavily before they generate reliable revenue. Artificial intelligence, biotechnology, advanced manufacturing and climate technology all require long development cycles and substantial technical teams.\n\nThe United States combines large public markets with deep private investment networks. Successful companies can raise successive rounds from specialist funds, corporate investors and institutional capital. Switzerland has strong private wealth and a sophisticated financial sector, but much of that capacity does not automatically flow into high-risk, long-horizon venture investments.\n\nEurope adds another layer of difficulty through fragmented national markets, regulations and investor networks. A company may need to raise money in several jurisdictions while selling across the continent. The resulting process can slow expansion at the point when American competitors are building scale.

The ownership data shows where European deep tech is ending up. Dealroom figures cited in the report show that nine of the 10 largest European deep tech deals by value between 2019 and 2025 involved a US buyer. The remaining transaction involved a Japanese medical technology company.\n\nThe pattern extends to public markets. Since 2015, 22 VC-backed European deep tech companies with valuations above $500 million have listed on stock exchanges. Only four listed in Europe. The figures suggest that European research can produce valuable businesses while European capital markets struggle to retain them through later stages of growth.\n\nFor Swiss founders, a foreign acquisition can provide the financing needed to expand, but it may also shift strategic control, research priorities and high-skilled employment away from Switzerland. A company that begins in Zurich can end up reporting to a US parent, raising its next round in California and building its largest commercial operation elsewhere.\n\nThe trend is not unique to Switzerland. A 2024 report by Mario Draghi, the former president of the European Central Bank, warned of a cycle in which high-growth companies leave Europe, reducing the pool of ambitious projects available to attract investors. That smaller pool then makes it harder to build a stronger funding market.