Swiss telecommunications company Swisscom is calling on institutional investors, including pension funds and asset managers, to fund the country’s start-up ecosystem with CHF50bn (€52bn) until 2030.
The company’s chief executive officer, Christoph Aeschlimann, warned in an interview with newspaper Le Temps that Swiss start-ups need capital to compete internationally.
“The investment target of CHF50bn this decade – CHF5bn per year – is a minimum in order to keep up with competition for innovation globally. That may seem like a lot, but compared to the amounts invested in research, it is little,” he added.
According to Aeschlimann, currently the largest share of funds for investments in start-ups comes from foreign investors, therefore he urged domestic institutional investors such as pension funds, asset managers and large companies to step up.
He added that 20 institutional investors have allocated capital to Swisscom’s funds raising CHF375m. “We want to continue the same model on a larger scale,” he said.
Swisscom is also setting up a foundation in partnership with universities and other companies to improve the framework conditions for start-up investments, with firms listed on the blue chip index SMI that have already been given the green light to join, according to reports.
“We are looking for 15 to 20 members. We want the foundation to complete its work by the end of the decade. It must be completed by 2030,” the CEO said.
The Swiss government has tried to boost pension fund allocations to start-ups by adding a separate ’unlisted assets’ category to the occupational pension law BVV 2 and the law on investment foundations to be able to invest in innovative and young companies.
Pension funds are allowed to invest up to 5% of their total assets in unlisted companies since 1 January 2022. The government used the same logic applied to create a stand-alone asset category for infrastructure with a maximum investment limit of 10% of total assets.
According to the Swiss Venture Capital Report 2023 published by the news portal startupticker.ch and the Swiss Private Equity & Corporate Finance Association (SECA), capital invested in Swiss innovative companies reached an all-time-high in 2022 at CHF3.96bn, mostly in the fintech and information and communications technology sectors.
NEST Sammelstiftung was the only pension fund mentioned in the report that invested in a start-up last year – Piomic Medical develops medical devices for the treatment of hard-to-heal wounds – raising CHF7.5m.
The Swiss government is planning to set up an innovation fund (Innovationsfonds) to finance start-ups especially during the growth phase and especially in the field of decarbonisation and digitalisation.