Swisscom wants to raise 50 billion in venture capital for tech companies
Published: Tuesday, Oct 31st 2023, 10:20
Updated At: Wednesday, Nov 1st 2023, 00:55
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Swisscom wants to raise 50 billion francs in venture capital for young Swiss tech companies. The aim is to help the young companies expand and prevent them from migrating abroad. That would be twice as much venture capital as today.
The Swiss ecosystem currently consists of around 2,500 startups that employ 30,000 people in Switzerland and are worth more than 70 billion francs, Swisscom CEO Christoph Aeschlimann said in an interview with the French-speaking Swiss newspaper Le Temps on Tuesday. He added that the Swiss ecosystem is financed by venture capital to the tune of 2.5 billion francs a year on average.
"Our goal is to double this amount to 5 billion per year, or 50 billion over ten years by 2030. Currently, more than 80 percent of this money comes from investors of foreign origin," Aeschlimann continued. Therefore, he said, the commitment of Swiss institutional investors such as pension funds, asset managers and large companies must be strengthened.
Swisscom does not want to operate globally
Swisscom itself has invested its own money in some 40 Swiss startups, which have created more than 2,500 high-tech, value-added jobs, Aeschlimann said. However, he said, the telecom company does not have the ambition to go global. That is not compatible with the mandate of the Swiss government, which owns 50.1 percent of Swisscom's share capital, he said.
Swisscom's investment program is profitable, he said. The sales of investments are continuously reinvested in new startups. For example, he said, 20 institutional investors have shown interest in participating in two Swisscom funds totaling 375 million francs. "We want to continue the same model on a larger scale," Aeschlimann said.
SMI groups join in
"In parallel, we are setting up a foundation with universities, the ETH, universities and companies to improve the framework conditions." Several companies from the leading index of the Swiss stock exchange SMI have already given the green light for their participation, he said.
The entrance ticket for the foundation costs 1 million francs, said Aeschlimann: "We are looking for between 15 and 20 members. We want the foundation to do its work by the end of the decade. It must be completed by 2030.
"The investment target of 50 billion Swiss francs this decade, or 5 billion Swiss francs per year, is a minimum to keep up with global innovation competition. That may seem like a lot, but it is little compared to the amounts invested in research," Aeschlimann said.
The twelve most innovative countries in the world would put 50 centimes into venture capital for every franc they invest in research and development. In Switzerland, he said, the ratio is four times smaller, at just 12 centimes, or 2.5 billion francs a year for startups versus 22 billion francs a year for public and private research institutions. "The goal is to double this ratio and reach at least 25 centimes, which would mean 5 billion per year and thus 50 billion in this decade," the Swisscom chief said.
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