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Sharp Drop in Swiss Fintech Investments
According to the Swiss Venture Capital Report, investments in this sector plummeted by nearly 60% in the first half of 2024 compared to the same period last year. The number of financing rounds also halved.
While Swiss startup funding dipped by around 10% overall, the fintech sector experienced a much more severe downturn. Investors increasingly favor biotech, energy, and cleantech, leaving fintech startups struggling to secure capital.
Investment in Swiss startups in first half of year, Source: Swiss Venture Capital Report 2024 | Update, Startupticker.ch, SECA and startup.ch, Jul 2024
The problem is compounded by a scarcity of large-scale investments
The total value of the three biggest funding rounds in the first half of 2024 was significantly lower than in the previous year, and the number of later-stage deals also dropped. This suggests investors are becoming more selective and demanding higher performance from startups before committing significant funds.
Despite these challenges, early-stage fintech startups are bucking the trend. They secured more funding and investment rounds compared to the previous year, indicating potential for growth in this segment. However, valuations for later-stage companies have dropped considerably.
The exit landscape for Swiss startups remains bleak
The number of acquisitions and IPOs was low, and many of the deals were rescue operations rather than profitable exits. Strategic investments, where established companies acquire stakes in startups, were also scarce.
Despite the current downturn, investors maintain a cautiously optimistic outlook. A survey by the SECA investor association found that most investors expect an increase in investment opportunities and exit possibilities in the coming year. They also have significant funds available for future investments.
The challenges faced by Swiss fintech startups mirror the global trend. Fintech funding worldwide decreased by over 30% in the first half of 2024, highlighting the industry’s overall struggle to attract investor capital.
In summary
The Swiss fintech sector is navigating a challenging landscape marked by decreased funding, fewer large-scale investments, and a difficult exit environment. While early-stage startups show promise, the overall picture is bleak. However, investors remain hopeful for an improvement in the coming months.
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