What support do startups receive?

After several years of strong growth, startup investment in Switzerland declined by around 15 percent in 2024. This downturn has renewed the debate on whether existing public support instruments are sufficient to stabilise the ecosystem during challenging market phases.

While private capital remains the primary driver of startup growth, periods of market uncertainty often expose financing gaps, particularly for scale-ups.

Why public co-financing is being discussed
In response to declining investments, the Federal Council was tasked with examining whether matching grants and public co-financing instruments could help compensate for market inefficiencies. Such models are widely used internationally to mobilise private capital and reduce investment risk.

Although the Federal Council recognises the potential benefits of these instruments, it currently relies on existing tools such as Innosuisse and does not support the creation of a dedicated innovation fund.

How matching grants work
Matching grants typically link public funding to private investment. Public funds are only released if startups successfully raise capital from private sources and meet predefined conditions, such as remaining in the country for a certain period.

This approach ensures market validation while leveraging public funding as a catalyst rather than a substitute.

Why this matters for startups
During investment downturns, even strong startups can struggle to secure follow-on financing. Matching grants can help bridge critical funding gaps, reduce the risk of relocation abroad, and keep value creation within Switzerland.

Political outlook
The central question remains whether existing instruments are sufficient to support startups through volatile investment cycles. Further political discussion will focus on balancing fiscal constraints with the long-term benefits of sustained innovation.

Conclusion
Well-designed public co-financing can strengthen startup ecosystems without distorting markets. The debate now centres on whether Switzerland is willing to use these tools more strategically to secure long-term competitiveness.