Switzerland is now home to the fastest-growing venture capital ecosystem in the world, with only Dubai and Singapore keeping Austria from joining the top ranks. The exciting tech sector here has certainly fueled this growth, but opinions differ on how sustainable it really is.
According to Pitchbook’s Global Venture Capital Ecosystem Rankings for 2024, the rise of Austria and Switzerland might catch some off guard. Both countries rank lower on broader development scores but shine brightly in the country growth index, with Switzerland leading the way. This surge suggests an impressive period for startups and scaleups in the DACH region, but growth is relative. While both nations share positive traits, there’s ongoing debate about whether they can transform this growth into a lasting presence in the VC landscape.
Markus Gleim, a principal at Northzone, points out that Switzerland and Austria have developed strong startup ecosystems largely due to their academic institutions, like ETH Zurich. These schools consistently produce top talent and innovative spin-offs, particularly in fields like medtech and cleantech. Yet, sustaining this growth relies on creating a supportive environment for startups to evolve into stable, high-growth companies. To thrive internationally, they need to address late-stage funding gaps and foster cross-border partnerships.
Felix Ohswald, CEO of GoStudent, believes mindset plays a key role too. He sees GoStudent’s success as a factor propelling Austria up the VC rankings. He notes that the region’s smaller size means significant financing rounds can lead to high relative growth, but he emphasizes that this shouldn’t overshadow the need for sustainable competitiveness. In his view, the DACH mindset must shift to embrace the many great ideas and companies emerging from this vibrant environment.
It’s crucial for leaders to champion this change, fostering an environment where startups aim for global excellence. Ohswald argues for reducing red tape and enhancing educational institutions to support this ambition. He believes the DACH ecosystem has all the ingredients to reach the top and should boldly pursue that goal.
Some insiders predicted this “golden age” long ago. Andre Retterath from Earlybird Venture Capital wasn’t surprised by Switzerland’s top ranking. He notes that with abundant research, industry access, and proximity to other innovative ecosystems, funds were bound to flow into the region eventually.
Retterath defines a successful ecosystem as one that harmonizes smart talent, effective business practices, and collaboration. He’s cautious about comparing the DACH region too closely with places like Dubai and Singapore, emphasizing that what makes DACH special is its unique character and capabilities. Top academic institutions and a rich history of innovation make it a prime location for startups.
As the flywheel of the DACH VC ecosystem picks up speed, opinions diverge on whether its rise was inevitable. For some, like Gleim and Ohswald, the recent successes signal potential but risk becoming mere outliers unless both Austria and Switzerland focus on long-term development. Others see the region’s tech resources and VC backing finally gaining global attention.
Alan Poensgen from Antler highlights that while Switzerland and Austria have always shown promise, many founders would leave as their startups grew, drawn to ecosystems offering more talent and capital. Recently, however, he’s observed a shift—an increase in innovation, exits, and talent retention, with cities like Zurich now outperforming even Cambridge in producing unicorn founders.
Everyone agrees there’s a lot to be excited about, with the right conditions in place for future growth. The burning question remains: is this golden age just the beginning?