EPFL startups forge ahead despite the economic headwinds

EPFL startups raised CHF 470 million in 2023 – a record figure if we exclude 2021, an exceptional year with three IPOs. A total of 23 startups were created in 2023, and over a third of them by women.
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Startups suffered a “crisis” last year for the first time in a decade. The amount of capital raised by new businesses fell 30% in the US, 35% in Switzerland and 38% in France, for example, on the back of a slowing global economy. But startups coming out of EPFL were undaunted, and even raised a near-record CHF 470 million. This strong performance is due partly to the fact that many of them are deep tech firms, and therefore less affected by the economic downturn. “These companies have developed products and services based on advanced technology, and are still very attractive to investors,” says André Catana, the head of EPFL’s Startup Launchpad. The vibrant R&D ecosystem at EPFL and the Lake Geneva region more broadly are helping to create fertile ground for new businesses. EPFL’s first Investor Day, held in late 2023, proved highly successful. And an array of other indicators – like the number of startups created, students’ growing interest in entrepreneurship and the number of startups founded by women – similarly attest to the strength of innovation at our School.

An increase in startup funding

The incubation period for deep tech startups – that is, the time between when the technology is invented in a lab and when it hits the market – can last several years and run through several development stages. Many investors view scale-ups, or companies that have surpassed the initial startup phase, as a safe bet. Yet at EPFL, the number of startups that received funding of under CHF 1 million rose sharply in 2023. Firms carrying out larger funding rounds were impacted more heavily by the economic downturn. They’re in a phase where they still need hefty amounts of cash but are far from turning a profit, meaning investors tend to shy away in times of economic uncertainty.

Six EPFL scale-ups completed funding rounds of over CHF 20 million in 2023 – Distalmotion (CHF 134 million), Kandou (CHF 72 million), Ecorobotix (CHF 46 million) and Lunaphore (CHF 40 million, since then acquired by US-based Bio-Techne) – reflecting years of growth underpinned by prior investments. These six funding rounds were among the 20 biggest in Switzerland last year, alongside those by ClearSpace (CHF 26.6 million) and SWISSto12 (CHF 25 million).

Convincing investors to pour money into startups is no easy feat, as their technology is usually unknown and neither their investor pitch nor business plan has been put to the test. Start-up funds play an essential role in this phase. “The number of startups that completed the first funding round last year skyrocketed,” says Catana. “We had 120 rounds of under CHF 1 million in 2023, up from 94 in 2022, which was already a peak year. This cash can help the new businesses – most of which have just moved out of the research lab – build a solid foundation for future growth and attracting further investment.”

Factoring in the startups based at EPFL Innovation Park, which work with the School even though they’re not direct spin-offs, then the total amount invested in EPFL startups was CHF 769 million in 2023, including a CHF 235.8 million IPO by Oculis.

Women behind over a third of new EPFL startups in 2023

New businesses create jobs and spur innovation, and are a key driver of the economy. In Switzerland, universities are working with cantonal and federal governments to create an environment where startups can thrive. That includes providing financial support to reduce the risks for founders, help them build up a team, and accelerate their business development. These organizations also run an array of programs for entrepreneurs that offer coaching, training, experience-sharing and more. Thanks to this backing, engineers can quickly learn the ins and outs of starting a new business and get off on the right foot. EPFL has been accompanying startups for over 20 years and just crossed the 500 spin-off mark, including the 23 from last year.

Another milestone in 2023 was that over a third of the new businesses were created by women. We are starting to see more female role models at the top of scale-ups and even large companies. DePoly, Xsensio and Lunaphore, for instance, all have female founders. Every two years, EPFL hands out the Isabelle Musy Award to a female entrepreneur from the French- or Italian-speaking part of Switzerland, as part of its efforts to support outstanding young women. And six years ago, EPFL’s Vice Presidency for Innovation introduced a range of programs to encourage students who are interested in entrepreneurship. A growing number of students participates and 16 of the business ideas that came out of our programs eventually turned into new companies.

Cleantech on the rise

Over the past few years, EPFL has seen a sharp increase in the number of cleantech startups – companies that work in the areas of clean energy and the environment. That reflects current societal concerns, advances in science and technology, and EPFL’s strengths in these areas. Nearly a third of the startups created in 2023 were in the cleantech industry (28%); the two other main industries were IT (29%) and engineering-related deep tech (28%).