Last week the Department for Economic Affairs of the Canton of Zurich published a report examining the current state of Zurich’s financial market with a focus on private equity. Within the region of Zurich, they found 168 private equity and venture capital firms plus hundreds of family offices. While these numbers reflect a robust foundation, the authors point out to a fundamental lack in growth stage investments. The report concludes with several actionable recommendations.
The study subsumes the cantons of Zurich, Zug and Schwyz under Zurich’s financial center. For this region, it identifies 168 private equity and venture capital firms that are directly part of the financial sector. 63% of which are located within the canton of Zurich. Among these are well-known names such as EQT, Lakestar, Redalpine, and QBIT Capital.
Additionally, Switzerland hosts between 250 and 300 single family offices, most of which are in the region of Zurich, managing an estimated CHF 600 billion. The report estimates that more than 70% of their assets are held in operational family businesses, indicating their proclivity to invest in unlisted companies. 55% of the capital is allocated to alternative assets such as private equity, and 12% to venture capital investments. While the latter share is fairly high, their investment activity is not confined to Switzerland but has an international orientation.
Furthermore, the study identified 2864 foundations for the region of Zurich. Those supporting start-ups are primarily active in the early-stage phase and hence play an important role when it comes to transferring scientific insights in new products. Such foundations are for example the Gebert Rüf Stiftung, the elea Foundation, or the ETH Zurich Foundation. The authors point out the new tax policy which was introduced in 2024 in the canton of Zurich. This has opened new possibilities for foundations to invest in startups.
Challenges in growth financing
While a strong financial ecosystem is essential for fostering innovation, it also requires a sufficient number of investable startups. With 900 startups founded since 2014 which employ an estimate of 12’000 workers, this criterium is met in the region of Zurich. Nevertheless, the report identifies a lack in the funding of those startups in their later or growth stage. This issue is not confined to Switzerland but is a general problem in Europe, since Europe does not have financial players with the necessary capital and know-how for the growth business.
In line with the DeepTech Nation Switzerland Foundation, the study suggests promoting sufficiently large investment vehicles that are suitable for pension funds. With billions of Swiss francs under management, pension funds could play a pivotal role in bridging the funding gap for growth-stage startups. To facilitate this, the study recommends launching more educational programs to enhance venture capital expertise among pension fund managers.
Actionable recommendations
Other actionable recommendations include establishing dialogue platforms to strengthen collaboration between private equity players, institutional investors, startups, and the canton; marketing Zurich as an attractive destination for investors; and raising awareness among policymakers and the public about the importance of regional startup financing.
(Press Release / BK)
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The new Swiss Venture Capital Report was published on 26 January. It analyses 304 financing rounds closed in 2020 and includes further article such as an interview with Michael Hengartner, President of the ETH Board, and a list of Swiss "soonicorns". 
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