Technology / Switzerland
“Technology and money help solve world’s most acute problems”
Swisscom Ventures offers startups access to technical infrastructure and new markets as well as crucial financial support.
Dominque Mégret, Head of Swisscom Ventures
Dominque Mégret* is head of Swisscom Ventures, overseeing its investment in over 70 technology companies from its offices in Zurich, Bern, and Silicon Valley. It was created in 2007 as the venture capital arm of Swisscom AG, Switzerland’s leading telecom and ICT provider.
How has Swisscom Ventures evolved over the years?
Swisscom Ventures started around 15 years ago, investing primarily in Silicon Valley. In the U.S. we mainly scout and carry out POCs – Proof of Concepts. We soon realized that we could leverage that experience with U.S. companies who want to come to Europe. Today, we help U.S. companies access Switzerland, and vice versa.
Around 10 years ago we started investing more in Switzerland and became its largest venture capital firm, with $600 million under management advisory. Most of that has been raised in the last few years from external pension funds and institutional investors. Most investment decisions are made in Switzerland because we have a good network in the U.S., which we can oversee from afar. In the last 18 months we concluded many deals without in-person meetings, though we look forward to traveling to the U.S. again.
We are successfully replicating the venture capital model that has had such a tremendous impact on the development of the U.S. over 50 years – more than any president, because it makes it possible to digitalize whole industries and gives the U.S. huge soft power.
How do you differentiate between strategic and financial investments?
Strategic value can be found in many start-ups. We only invest in one percent of the deal flow but the other 99 percent of companies can create strategic value for us in terms of understanding market trends or developing partnerships, for example. On the portfolio side, profitability is a necessary condition for investment. But there, too, we help start-ups with access to markets, technology platforms, etc. Without adding strategic value, you are just another investor. In return, the start-up ecosystem adds value to Swisscom through innovation.
Quantenna is an example of U.S.-related companies we linked up with. We sourced them on the Stanford University campus and were the first customer and co-investor, with Sequoia Capital leading. We co-invested all the way to the IPO, bowing out for $1 billion. We added value as a customer and by presenting them to other European investors and telcos.
What is the state of digital innovation in Switzerland?
Switzerland is a deep-tech nation for hardware and software thanks to its R&D capacities. It focuses on B2B software, with most companies at the intersection of analog and digital. Sophia Genetics, whose listing was just announced, is a good example, and we were an early investor. They also launched their services in the U.S. with our help.
Where do you see the main synergies between Switzerland and the U.S.?
Establishing a presence in the U.S. is mandatory to reach international investors and scale, and eventually to access markets like NASDAQ but Swiss companies also like to stay close to their local ecosystem to benefit from the R&D.
The synergies are also strong for U.S. companies in Switzerland, which is an ideal European base due to its access to key markets and top local talent. Although the country has just eight million people, as home to major multinationals, it is one of Europe’s main decision centers.
How can the U.S. and Switzerland engage more actively?
Technology and money together can help entrepreneurs solve some of the world’s most acute problems, for example in fields relating to sustainability or in space technology. Investors have overlooked some of these but that will change in the next couple of decades. Switzerland has great sustainability credentials, and Swisscom has been named the world’s most sustainable telcos. Our culture is a factor: we live surrounded by nature and want to sustain it. In this field the U.S. and Switzerland can join forces very effectively.
We should avoid dogmatic discussions, such as whether pesticides are good or bad: ecoRobotix, a spinoff of EPFL – Swiss Federal Institute of Technology Lausanne, has developed smart technology to spray pesticides on crops in a targeted manner through AI-led image recognition. Similarly, precision medicine can ensure that patients receive only those medicines whose benefits they can absorb, without negative effects, based on their genetic profile and history of reaction. Switzerland can contribute a lot, combining AI with robotics and precision mechanics to create quality standards and improve sustainability.
*NOTE: Dominique Mégret recently published a book titled ‘Deeptech Nation’ to launch the debate on issues such as technological sovereignty, and the place of Swiss high-tech in a world dominated by American and Asian giants. To get your free copy follow this Link . ‘Deeptech Nation’ is also available for purchase on Amazon.
