Great Startups are Often Born in Times of Crisis
13.03.2020
This Wednesday Venture Kick invested 40,000 Swiss Francs in its 700th project, passing the CHF 30 million total in start capital investment in talented researchers to support the commercialization of their inventions to global markets. This milestone is achieved in the context of the coronavirus crisis which reminds of the financial crisis in 2008 when the Venture Kick program was launched. How did the first Venture Kick startups evolve that were born in hard times? Here are some lessons learned from the trenches.
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From September 2007 to December 2009 happened the last large-scale financial crisis, reminding us of the situation today. Back then, 69 startup projects received the first CHF 3 million support from Venture Kick. Today, 33 are still active companies while 11 have been acquired. This means that two third of the startup projects launched during the financial crisis became a success. These companies attracted CHF 939 million in investments, representing almost 30% of the cumulated investments attracted by all supported projects.
Two examples of startups born during the crisis can be found in InSphero and Lemoptix.
InSphero won CHF 130,000 in 2008, today it is a leader in the arena of 3D cell culture and body-on-a-chip technologies for in vitro drug discovery and safety testing with major pharmaceutical and biotechnology companies as customers worldwide. It was ranked several years among the TOP 100 Swiss Startups.
Lemoptix, which developed the next-generation micro-opto-electromechanical systems (MOEMS), received its Venture Kick in July 2008 and was later ranked 3 years in a row among TOP 100 Swiss Startups, and eventually successfully acquired by Intel in 2015.
Also Venture Kick is a success story on its own: Venture Kick was in 2019 the sixth most active global seed-stage investors, and number one non-US-based, according to Crunchbase. Venture Kick has supported more than 700 Swiss startups to date. "This underlines the unique potential for deep-science startups that can make their way from Swiss universities to global markets" says Jordi Montserrat, Venture Kick's Co-Managing director. "Global investors recognize Switzerland as a hub of high-potential entrepreneurial talent."
There is no doubt that the coronavirus crisis will be a major hardship for many Swiss startups. Closing deals with customers and partners will become much harder in the months to come. And finding courageous investors putting their money in early stage startups will probably be very difficult in the next months. But history also shows that very successful startups were born in times of crisis – like Google that came out of the ashes of the Internet Bubble burst 2001. “This is now the third major crisis I face as an entrepreneur. And I am worried as well,” says Beat Schillig, Co-Managing Director of Venture Kick. “but I am sure, that not even the Coronavirus crisis will be able to stop our Swiss startups!”