Start-ups worth a billion

The institutions of the ETH Domain produce around 60 spin-offs each year. Among them, five are valued at over one billion dollars. Here is an introduction to these five “unicorns”.
Five spin-offs from EPFL and ETH Zurich have achieved the remarkable status of "unicorns", i.e. a financial valuation in excess of one billion dollars. (Image: ETH Board / Shutterstock)

Switzerland regularly appears at the top of international innovation rankings. This can be seen in the hundreds of new technological and social innovation companies founded each year, in particular by scientists working at the country's universities.

The institutions of the ETH Domain are making a major contribution to this dynamism, with a steady increase in the number of spin-offs and a sharp rise in the amount of funding they raise each year - by 2021, more than CHF 1 billion.

Spin-off: from laboratory to company 

A spin-off is a company created from the knowledge and technologies acquired during scientific research. By transferring the results of their scientific activities to economy and society in this way, universities contribute directly to Switzerland's prosperity.

This success is due to the very favourable environment for innovation in Switzerland: political and financial stability, the presence of numerous national and international leading companies, a highly educated, mobile and international population, the development of regional hubs in areas such as health and information technology and, of course, top-class universities. “The institutions of the ETH Domain are following very promising lines of research," notes André Catana, head of start-up support at EPFL. “They have strongly developed their support for innovation with financial incentives, training, information and networking activities, and this has paid off.”

Five spin-offs from EPFL and ETH Zurich have achieved the remarkable status of "unicorns", i. e. a financial valuation of more than one billion dollars. “I don't think that becoming a unicorn is a goal in itself, but this status certainly brings great visibility," continues André Catana. “It can open doors and attract renowned people to its governance structures. Significant venture capital funding allows companies to grow without going public, and thus to continue to develop without having to publish detailed half-yearly reports.”

This enviable status can have some disadvantages. Extreme valuations can make it difficult for buyers to take over, as they are reluctant to pay such high amounts. And of course, a company's growth often involves relocating its activities, with the risk of seeing some of the jobs created elsewhere than in Switzerland. “This depends mainly on the market and is not unique to unicorns," André Catana plays down the issue. “And in most cases, companies keep a large part of their activities in Switzerland, especially R&D, in order to take advantage of the favourable environment we have got here.”

More than CHF 1 billion raised

The ETH Domain is clearly the driving force behind scientific innovation in Switzerland. Every year, scientists from its institutions file more than two hundred patents and launch about sixty new companies. By 2021, the ETH Domain's spin-offs have raised more than one billion francs (see ETH Zurich and EPFL), which is one third of the total funding raised by all start-ups in Switzerland.

Scandit (ETH Zurich, 2009) – App-based scanning facilitates logistics

Fedex, DHL and La Poste for shipments, Carrefour and Decathlon for products, SAS and Cathay Pacific for luggage and tickets: these are just some of the companies that use the products of Scandit, a spin-off launched in 2009 by two students and an alumnus of ETH Zurich. The company develops and markets logistics tools based on barcode scanning by smartphones. The app's reliability and speed benefit from machine learning algorithms. It can scan several labels at once, display additional information in augmented reality, or be linked to an on-board camera on automatic cleaning machines to inventory assortments in the absence of staff.

In February 2022, the startup announced an additional $150 million in funding and a valuation of over $1 billion. With 450 employees, it has 1,700 international customers, including three of the five largest postal companies in the world and eight of the top ten grocery stores in the US.

Nexthink (EPFL, 2004) – Managing staff IT tools

In 2004, an EPFL computer science student from Spain founded his company, Nexthink, in Lausanne. He saw a niche: using advanced analysis tools, including machine learning, to improve the stability of companies' IT systems. Better monitoring of all IT incidents and problems affecting staff helps the IT department to react quickly, manage the digital tools used in the company and better understand the experience of staff, a necessary step to improve it.

Nexthink is growing very fast. In 2020, the company has a turnover of over one hundred million dollars. It employs more than 700 people, half of whom are working abroad, particularly in the United States. Ithas some thousand clients such as Toyota, Siemens, 3M, Lufthansa, SNCF and Sega. In February 2021, it announced the raising of $180 million in financing led by the British investment fund Permira. Nexthink's valuation is estimated to rise to $1.1 billion, and the company recruited a former CEO of the IT company Adobe to its board of directors.

Climeworks (ETH Zurich, 2009) – Taking CO2 out of the atmosphere

Climeworks is one of the pioneering companies in capturing CO2 from the air. Founded in 2009 by two PhD students in mechanical engineering at ETH Zurich, it has since raised almost 800 million in funding, including 600 million in April 2022 – enough to give it unicorn status.

It opened the world's largest capture facility in September 2021 in Iceland, a first demonstration of the possibility of capturing carbon dioxide from the atmosphere on a large scale. The Icelandic site has favourable conditions: a geothermal energy source as well as basaltic rock formations in the subsoil that allow CO2 to be stored as calcium carbonate, a mineral rock. The plant can capture 4,000 tons of CO2 per year, which is still a modest amount, but corresponds to the annual emissions of about 400 people in Switzerland. The cost of the process is still extremely high, at around $700 per ton of CO2, ten times the price of European carbon certificates. Despite these drawbacks, this technological and entrepreneurial feat has been widely perceived as a potential new tool in the fight against climate change. In June 2022, Climeworks started the construction of a second facility in Iceland with a tenfold capacity of 36,000 tons per year.

Mindmaze (EPFL, 2012) – Video games support physical rehabilitation

If the idea sounds simple, it had to be done: mixing video games and physical exercises in a therapeutic setting. This is the approach taken by Mindmaze, founded at EPFL in 2012. Its devices gamify the exercise sessions needed to regain motor skills lost due to a stroke or neurodegenerative disease such as Parkinson's. The company quickly attracted significant funding, moving to unicorn status, after just four years, in 2016. It then went through a rough patch, but announced significant new funding in 2021 and 2022.

Mindmaze's physical exercises – or games – are done during a consultation or at home. They encourage patients to perform certain hand, arm or full-body movements to successfully control the path of a video game character. The system records progress during successive sessions, making it easy for the therapist to monitor. The company is also developing sensors equipped with several accelerometers that accurately measure the parameters of walking or running, thus opening up the high-tech sports market.

GetYourGuide (ETH Zurich, 2009) – A platform centralises tourist offers

In 2009, four ETH Zurich students in biochemistry, computer science and physics launched a start-up in a field far removed from their discipline: tourism. Their platform, GetYourGuide, initially aimed to offer guided tours by local guides. The idea didn't work out, and the site turned into a global online marketplace for tourist offers and tours, similar to Viator.

Only ten years later, in 2019, GetYourGuide's valuation is estimated at nearly two billion francs, following a new financing of 484 million dollars led by the Japanese venture capital fund SoftBank Vision Fund. The company has 700 employees, including 500 in Berlin and 70 in Zurich. It has some 60,000 tourist offers and has sold 58 million tickets since its creation.