The relentless rise in stock markets since March 2020 has created an attractive window of opportunity for businesses looking to list their shares. The number of IPOs around the world rose sharply in 2021, with the total issue volume soaring to a record 453 billion dollars, up 67% from the prior year. Three EPFL startups – Sophia Genetics, Astrocast and Onward Medical – took advantage of the positive momentum to float their stock, joining the only three other EPFL-born firms to have done so: Logitech, Biocartis and Bicycle Therapeutics. The successful IPOs of this year’s cohort are due in part to the favorable market climate, but even more so to years of intense R&D, fundraising and pilot testing, as well as smart strategic decisions. The energetic, ambitious management teams were able to take their businesses from inception to IPO in under ten years. Another EPFL startup, Nexthink, became the School’s second unicorn (after MindMaze) in 2021 after completing a funding round that brought the company’s value to over one billion dollars, even though it has remained private. The founders of Sophia Genetics, Astrocast, Onward Medical and MindMaze still sit on their management teams and have kept close ties to EPFL and the Lake Geneva region. And at each step of their companies’ business development, they drew on the support of local programs providing entrepreneurship training and financial aid. Today these programs are regularly updated and enhanced to better suit the needs of the startups they serve.
IPOs as a sign of maturity and sound fundamentals
During their IPOs this year, Sophia Genetics raised 234 million dollars, Onward Medical 93 million francs, and Astrocast 40 million francs. Stock-market flotation is an essential step for the growth and international expansion of high-tech companies whose products usually require years of hard work and sizeable investment before being ready for market launch. Onward Medical’s IPO, carried out on the Brussels Stock Exchange in November, was “the biggest flotation ever by a young medtech company in Europe,” says the firm’s CEO, Dave Marver. The company plans to use the proceeds to finalize the development of its therapies for helping the disabled walk again, before introducing them on the market. “We plan to launch in 2023 for the non-invasive version, and will continue our clinical trials with the CHUV to create an implantable version of our device,” he says.
Going public is a major step forward in a company’s expansion, but it’s not an end in and of itself. “An IPO isn’t necessarily a mark of success since a lot of these firms have yet to turn a profit,” says André Catana, the head of EPFL’s startup unit. “But it’s clearly a sign of recognition, maturity and sound fundamentals.” For Sophia Genetics, the IPO is just one more milestone along its growth strategy. According to founder and CEO Jurgi Camblong, “the flip side of the coin is that going public brings a whole new level of responsibility. The capital that was invested in our firm wasn’t allocated elsewhere, so we have to use it wisely. That means achieving new breakthroughs in precision medicine and improving the lives of as many patients as possible.”
Swiss roots with global ambitions
All three businesses are firmly rooted in the Lake Geneva region, but they each chose to list on a foreign exchange. That was the decision made by two-thirds of the thirteen Swiss companies that went public this year – Switzerland’s stock exchange still attracts few startups. “We thought about listing in Zurich, but for now the Swiss exchange isn’t well-suited to businesses whose products aren’t yet on the market,” says Marver. However, times are changing. “Just a few years ago, Nasdaq was the only exchange that mattered for startups, which often moved their headquarters to the US as a result,” says Jordi Montserrat, head of the western Switzerland branch of Venturelab, a startup support company. “But now, exchanges in Europe are becoming more attractive.”
Marver explains that the Brussels exchange was “the right choice both financially and strategically, since it’s the best one for life-science firms in Europe right now.” But his company’s joint research efforts with EPFL and the CHUV remain essential for product development, and he intends to keep most of Onward’s operations in Vaud Canton. “We currently have around 50 employees here, who, like me, have lasting ties with the region,” he says. For its part, Sophia Genetics has just opened a new headquarters in Rolle where 350 of the company’s 400 employees are now based. This comes just ten years after Camblong gave an interview from his small office on the Lausanne campus, for an article for EPFL’s homepage, where he described his vision for a new business that was yet to be created. For the past few years he’s been focusing on Sophia Genetics’ US expansion but plans to keep much of its operations in Switzerland. “Europe is still our main market and the Lake Geneva region – thanks largely to EPFL – is an incredible pool of talent,” he says.
Going public can also be a way for EPFL startups to keep their businesses in Switzerland. Until now, many founders sold their startups to bigger companies, often multinationals, in order to raise hefty sums of capital so that initial investors could exit. And these multinationals usually had few ties to Switzerland and readily transferred operations to another country.
“Startup support programs work like a relay team”
The startup ecosystems at EPFL, in Vaud and around Switzerland also play an important role in fostering an entrepreneurial culture and getting young firms off the ground. “I like to think that we’ve planted a lot of seeds and nurtured budding plants,” says Montserrat. “It’s like we’re part of a relay team: if the first two support programs don’t pass the baton correctly, the third one won’t ever receive it.” He still remembers the advice he gave to Sophia Genetics some ten years ago. Today, EPFL startups aren’t afraid to aim high and some analysts believe we could soon see more IPOs, even if stock markets calm down. The trail has been blazed and Swiss entrepreneurs have several role models to look up to. Venturelab and SIX Swiss Exchange (the company that runs the Swiss stock exchange) recently introduced a program to give Swiss startups the skills they need to make the right financing decisions in both public and private markets.
How were the three startups that floated this year able to get to the IPO stage so quickly? Camblong points to three main factors: “You need to make sure your product meets a real market need, find the right revenue model and update it regularly based on the growth stage your company is in, and surround yourself with the right people – from the board to frontline employees – who can bring professional skills to your company at each step of the way.”
...which raised 93 million francs during its IPO, was created out of years of joint research headed by EPFL professor Grégoire Courtine and involving EPFL and Lausanne University Hospital (CHUV). In preclinical tests of Onward’s device, several patients with spinal-cord injury were able to walk again almost independently. The company is now developing two systems that it plans to launch soon on the market: one works through an implant while the other is external. Both of them are designed to deliver targeted, programmed stimulation of the spinal cord to restore movement and other functions, thereby improving patients’ quality of life.
...raised 234 million dollars during its IPO on Nasdaq in July, marking the biggest flotation by a Swiss company in 2021. This comes on top of a 110-million-dollar fundraising round carried out with private investors less than a year earlier. Sophia Genetics was founded in 2011 and is a pioneer in the use of artificial intelligence to study diseases. Today it’s the global leader in data-driven medicine with over 1,000 hospitals employing its AI technology to analyze genetic information obtained during medical exams. The results give doctors important statistics, help them make prognostics, and provide insight into certain pathologies.
...raised 40 million francs during its IPO on the Euronext Growth Oslo exchange in Norway. This listing was the first to give public investors a chance to invest in a satellite operator for the Internet of Things. Astrocast was founded in 2014 and has developed low-cost, global satellite network designed to provide connectivity to remote areas, such as far-offshore facilities and scarcely populated regions of developing countries.