CTI-coached firms raise SFr 90 million in 2003

Projects awarded the CTI label receive help to run their business. CTI

In the worst year since the late nineties to raise venture capital in Switzerland, the CTI reports that firms completing its rigorous “CTI Startup Label” programme have successfully raised more than SFr90 million ($71 million).

This number represents a significant share, some 60 per cent, of the total amount of venture capital raised in Switzerland by innovative firms.

A total of SFr150 million has been recorded year-to-date by Tornado Insider’s Research database, which tracks funding of growing, high-tech startup firms in Europe.

CTI Start-up is an initiative of the Federal Office for Professional Education and Technology (OPET). The CTI in general promotes innovation in Switzerland.

It has a small, full-time staff that is responsible for managing a number of services and contracts handed out to consulting firms and research organisations. One of its instruments is the “Label” programme.

From Science to Market

Projects awarded the CTI label receive business coaching from one of the members of the CTI’s wide-ranging network of experienced business people who work for a small honorarium paid by the CTI.

They help the teams develop their business plans, study their markets, and position their products. They also help them find venture capital investors.

The firms are typically active in Switzerland’s high tech clusters, namely biotechnology, life science, MedTech, micro and nanotechnology, or communications technology, including IT.

Each label team has to meet criteria set up by an industrial board, also populated by experienced entrepreneurs.

Once the label is granted, venture capitalists are introduced to the firms through the CTI’s investor association, also an ad hoc network comprised of business angels and professional investment firms from industry, not civil servants.

CTI success

Successful label companies on the fast track for growth, include Sensirion now employing more than 40 people and BridgeCo which has attracted venture capital from Silicon Valley investors. BridgeCo employs 45 people, whose chips are being used in designs by big name electronics firms.

Four new CTI Start-up labels were granted in November, bringing the total number of firms to receive the label to 84.

The new label carriers are the startups Innovative Silicon, a firm that is transferring technology from the EPFL in the field of DRAM cell memory chips; Lyncée Tec, which makes an add-on for atomic force microscopes and other visualization systems at the nano-level, Intellion, which specializes in RFID systems, and Spectraseis GmbH, whose technology better identifies potential of gas and oil drilling sites.

These firms are all currently on the road to raise venture capital now.

Survival

According to the CTI, its startup companies have a good survival rate. About 70 firms are still active, generating more than SFr100 million in revenues this year alone.

Similar success rates are reported by other European innovation agencies. For example, in France ANVAR reports that some 70 percent of small and medium sized firms created with its support are still operating a decade after their creation. The average survival rate in France is 50 per cent after seven years.

Some of the firms that have benefited from the CTI’s innovation efforts over the years – although not necessarily label companies – include Logitech, now a billion dollar computer peripheral firm whose early products were based on technology that spun out of Swiss universities.

The same goes for Disetronic, which grew into a multi-million franc, publicly traded venture and was recently acquired by Roche for more than half a billion Swiss francs.

The CTI is the government agency that promotes innovation in Switzerland, in particular amongst small and medium sized enterprises. It does not invest directly in companies; rather it subsidizes education and support for entrepreneurs and pays for applied research involving small and medium sized firms and Swiss universities.

Valerie Thompson