Swiss authorities restructuring startup investment program targeted at emerging markets
Swiss SECO Startup Fund Relaunched to Boost High-Growth Startups in Emerging Markets
The Swiss State Secretariat for Economic Affairs (SECO) has taken a significant step to support high-growth and impact-driven startups with Swiss ties in emerging markets. The SECO Startup Fund, which was first established in 1997, has been relaunched with a commitment of CHF 5m (€5.4m).
The fund, now managed by advisory and impact investment firm iGravity and Seedstars, aims to help post-revenue startups secure their first loan, building their financial history for future loans from commercial banks or traditional investors. The fund will predominantly focus on post-revenue startups in Africa, Asia, Latin America, and Eastern Europe.
To be eligible for the SECO Startup Fund, companies must demonstrate meaningful Swiss ties, which may be through shareholders, suppliers, or partnerships. They must also align with SECO’s cooperation strategy focused on decent work, access to critical goods and services, and climate-smart capacities. The startups targeted are early-stage or growing innovative companies with proven business models that face challenges in accessing traditional growth financing.
The fund targets startups that contribute to these themes and have a connection to Switzerland either directly or indirectly to benefit from tailored financing aligned with Swiss global cooperation priorities. The SECO Startup Fund offers single-digit interest rate loans and low ticket sizes, starting from CHF 300,000.
One such startup that has benefited from the SECO Startup Fund is eWaka, a Nairobi-based startup that provides electric bikes and a battery-swap network for corporate clients. eWaka received a CHF 500,000 loan from the fund and boasts a Swiss-backed leadership team.
Alisee de Tonnac, CEO of Seedstars, expressed excitement about the next generation of innovative businesses in emerging markets. Patrick Elmer, CEO of iGravity, stated that the fund isn't just about capital, but about creating economic opportunity by helping businesses grow their operations and generate local employment through tailored financing mechanisms aligned with Switzerland’s global cooperation priorities.
Frei, the Swiss Secretary of State for Economic Affairs, acknowledges the high risk perception that commercial investors have for certain countries. However, the SECO Startup Fund's thorough due diligence process is designed to mitigate this risk. The fund has invested CHF 44m in more than 120 companies since its foundation in 1997, demonstrating its commitment to supporting innovative startups in emerging markets.
The SECO Startup Fund is being used to channel funding towards entrepreneurs who are building strong companies and solving real problems in their communities. With the relaunch, the fund has evolved its eligibility criteria, no longer requiring one of the investors to have residency in Switzerland. This change opens up the fund to a wider range of eligible startups.
In conclusion, the relaunched SECO Startup Fund offers a significant opportunity for high-growth and impact-driven startups with Swiss ties in emerging markets to secure funding and grow their operations. The fund's focus on creating economic opportunity and its alignment with Switzerland's global cooperation priorities make it a valuable resource for innovative startups in Africa, Asia, Latin America, and Eastern Europe.
- The SECO Startup Fund, relaunched with a commitment of CHF 5m, aims to invest in post-revenue startups that are focusing on renewable energy and contributing to the energy transition.
- The fund, managed by iGravity and Seedstars, will be providing single-digit interest rate loans and low ticket sizes to such startups, while also taking into account their social impact and contribution to the business and technology sectors.
- With the relaunch, the SECO Startup Fund has expanded its eligible startups to include those with a connection to Switzerland, regardless of their investors' residency status, thereby fostering a broader investment in innovative companies that are aligned with Switzerland’s global cooperation priorities.
