This article is an analysis of the SECA Venture Capital 2025 Mid-Year Report.
Switzerland’s venture capital performance in the first half of 2025 appears solid on the surface. Invested capital rose 36% year-on-year to CHF 1.47 billion. Yet beneath this surge lies a fragile reality: deal volume continues to shrink, capital is flowing to a narrowing set of sectors and stages, and investor confidence is riddled with contradictions. The latest Swiss Venture Capital Report, co-published by SECA and Startupticker.ch, reveals not a market in recovery but one grappling with its dependencies and imbalances.
Three forces define the current cycle: overconcentration in biotech, a capital gap for scale-up, and a mismatch between investor optimism and portfolio anxiety. While headlines focus on unicorns and record rounds, the data tells a more precarious story.
Biotech as Lifeline—or Lifeboat?
Sector dominance driven by a few mega-deals
Biotech accounted for CHF 705 million of capital in H1 2025, nearly half of the total raised nationwide. This marks a historic high, powered by a handful of huge rounds. Windward Bio alone brought in CHF 183.1 million. GlycoEra followed with CHF 107.5 million. Both companies are early-stage but backed by highly experienced founding teams and late-stage science pipelines. These deals highlight the country’s unparalleled capacity to translate academic research into investor-grade companies.
The investment volume appears impressive, but it is highly concentrated. Seven of the top ten investments were in biotech. Five of those were early-stage. While this validates the strength of Swiss life sciences, it also signals a risk of systemic imbalance. Without diversity in sector growth, the national innovation engine remains exposed to the cyclicality of a single vertical.
The danger of a lopsided innovation economy
Other sectors have shown signs of life. ICT and fintech posted recoveries in invested capital, rising 86.3% and 92.7% respectively. Yet these gains remain below pre-pandemic benchmarks. More concerning is cleantech, which saw its capital base halve and deal volume drop nearly 20%. This performance diverges sharply from EU-level climate tech trends, where cleantech funding grew through expanded subsidy alignment and sovereign LP activity. The Swiss underperformance reflects a structural misalignment between national policy and venture appetite.
The narrowing of capital to a select few biotech deals also coincides with a decline in the total number of financing rounds. From 138 rounds in H1 2024 to just 124 in H1 2025, Switzerland has now posted three consecutive periods of falling deal volume. This pattern highlights that capital is flowing not broadly, but vertically, upstream toward fewer, de-risked companies.
Scale-Up Capital and Stage Mismatch
Early-stage thrives, but growth capital stalls.
Seed and early-stage rounds remain active. Seed financing has more than tripled compared to 2019 levels. Early-stage raised a record amount, again buoyed by significant biotech plays. However, the late-stage is deteriorating. CHF 660 million was raised in growth rounds in H1 2025, 5.5% below the previous year. In 2022, the figure exceeded CHF 2 billion. Deal counts for late-stage rounds have fallen even below 2019 levels.
This compression is not unique to Switzerland. Globally, crossover investors have exited the growth stage. Yet Switzerland’s challenge is magnified by the absence of domestic growth capital. There are no sovereign-led growth funds like France’s Tibi or Germany’s KfW Capital. As a result, start-ups must either look abroad or stagnate between Series A and exit.
Regional imbalances stifle broad-based innovation.
Basel-Stadt emerged as the capital magnet, raising CHF 420.5 million—an all-time high for the canton. Zurich contributed CHF 449.7 million, but its share of national invested capital fell to 30.5%, historically low for the region. Zug posted a strong rebound, while Vaud saw its capital raise drop to a five-year low of CHF 168 million despite a slight uptick in rounds.
These disparities suggest that national innovation outcomes continue to be heavily dependent on a few core cantons. Outside of Basel and Zurich, the flow of venture capital is inconsistent and vulnerable to macroeconomic shocks. Without intentional regional development, Swiss innovation will continue to cluster narrowly, thereby limiting its broader economic impact.
Foreign Dependency, Exit Freeze, and Survey Contradictions
The U.S. lifeline comes with strings attached.
In H1 2025, U.S. investors accounted for more than a third of all venture capital invested in Swiss start-ups. They participated in around a quarter of all financing rounds, with a strong presence in nine of the seventeen biotech deals. This trend underlines the global appeal of Swiss deeptech and life sciences.
However, dependency on American capital introduces external volatility. Nearly half of Swiss investors now believe that U.S. policy shifts—particularly under the Trump administration—will negatively affect their portfolio companies’ international operations. Exposure to currency risks, tariffs, and regulatory disruptions is rising. A diversified foreign investor base would de-risk this exposure, but Switzerland remains heavily skewed.
Exits remain elusive, dampening the recycling loop
Exits remain scarce. The report highlights just two meaningful outcomes: Araris Biotech’s acquisition by Taiho Pharmaceutical, which secured unicorn status, and BioVersys’ CHF 80 million IPO on the SIX Swiss Exchange. ICT saw a modest increase in exits, from six to ten, but most were small acquisitions with limited downstream impact.
This lack of liquidity has consequences. Fewer exits mean limited recycling of capital back to LPs and fund managers. Secondary markets remain underdeveloped. The IPO window remains narrow. Without stronger exit mechanisms, even well-performing portfolios will struggle to return capital, which will affect future fundraising and deployment cycles.
Investor sentiment splits between optimism and caution.
The investor survey adds nuance to the capital trends. Two-thirds of respondents rate the environment as good. Eighty-eight per cent expect more deal opportunities in the coming year. Yet only 72 per cent plan to increase new investments. The gap between optimism and action reflects caution.
Fifty-four per cent of respondents expect entry prices to decline. Forty-five per cent anticipate further valuation markdowns in their portfolios—up from 38 per cent the previous year. Many of these write-downs have likely already occurred, suggesting either delayed recognition or bridge rounds that masked valuation drops.
The fundraising outlook reflects similar tension. Last year, 27 per cent expected fundraising conditions to deteriorate. This year, that number jumped to 49 per cent. Smaller managers—especially those with sub-EUR 50 million funds—face growing pressure as institutional LPs remain risk-averse. If the next fundraising cycle stalls, the ecosystem’s ability to support new founders will weaken.
Strategic Blind Spots and the Missing Middle
Switzerland’s reputation in biotech is deserved. The ability to launch companies with clinically advanced assets and experienced management teams is world-class. But this strength has become a crutch. Non-biotech sectors remain underdeveloped and underfunded. ICT, fintech, cleantech, and frontier tech have few scale-up paths, fewer role models, and limited growth-stage capital.
The country’s mid-stage vacuum mirrors a broader European challenge. Yet others are responding. France’s Tibi initiative unlocked EUR 6 billion in growth equity. Germany’s KfW Capital is backing scale-up funds. Switzerland has yet to introduce a comparable mechanism.
Domestic capital remains conservative. Pension funds and insurance managers rarely allocate to venture. Family offices invest sporadically, often alongside U.S. partners. Without homegrown institutional LPs willing to support Swiss-led growth funds, capital formation will continue to rely on foreign sources.
The exit bottleneck compounds the issue. With few IPOs and limited M&A, the capital loop breaks. LPs hesitate. GPs tighten. Founders stall. Innovation is launched, but rarely scaled.
Switzerland at a Crossroads
The Swiss venture market in 2025 stands at a crossroads. Biotech success stories are real, but they mask deeper vulnerabilities. The country’s capital flows are concentrated, its scale-up pipeline is thinning, and investor sentiment is divided between opportunity and anxiety.
This is not a crisis. It is a signal. Switzerland can extend its leadership in innovation by broadening its focus, strengthening domestic growth capital, and building infrastructure for liquidity. The next wave of Swiss unicorns will come not just from labs in Basel, but from clean energy labs in Lausanne, fintech platforms in Zug, and AI companies in Zurich.
To unlock that future, the ecosystem must stop relying on a single strength and start building across the board.
References
¹ PitchBook European Venture Report Q4 2024
² Swiss Venture Capital Report 2025 – H1 Update (SECA, Startupticker.ch)
³ CB Insights Venture Capital State Report Q2 2025
⁴ EIF VC Survey 2024 – European Investment Fund
⁵ OECD STI Outlook 2023 – European Innovation Gaps
⁶ Startup.ch database (accessed July 2025)
