Swiss Startups Grapple with European Funding Shortfall

Clara Lepsius and Ben Chen, both graduates of the federal technology institute Zurich (ETH), opted to establish their infant nutrition technology startup, Aluere, in Zurich. This decision contrasts with a prevailing trend of startups relocating to the United States in pursuit of more substantial funding opportunities. Lepsius noted that while Europe may operate at a slower pace compared to the US, it offers a more meticulous approach to business development.

Clara Lepsius, an alumna of ETH, developed her thesis at Harvard University, where she partnered with fellow ETH graduate Ben Chen to co-found Aluere. Their company leverages technology to measure and enhance infant nutrition, a concept inspired by research indicating a higher incidence of chronic illnesses in infants who are not breastfed. ETH actively supports entrepreneurship, producing numerous deep tech spin-offs annually and offering resources such as a Student Project House and mentorship from successful alumni.

Swiss and broader European startups encounter a structural capital gap that hinders their ability to scale operations to sustainable levels, often prompting founders to seek funding in the larger US markets. A report by the Technical University of Denmark described Europe's venture capital system as "underpowered." Data from Dealroom indicates that between 2019 and 2025, US companies were the buyers in nine of the top ten deep tech startup acquisitions in Europe, measured by value. Furthermore, since 2015, only four of 22 European VC-backed deep tech companies valued over $500 million chose to list on European stock exchanges.

Despite ETH's success in fostering an entrepreneurial environment, its spin-offs will eventually face the same funding constraints prevalent across Europe. Ashwin Lalendran of IndustriousAF suggests that the number of billion-dollar Swiss AI companies will remain negligible unless domestic and European venture capital investment significantly increases. Frank Floessel, head of entrepreneurship at ETH, emphasises the need for political support to simplify business creation and growth, as founders are driven by economic considerations, making the US an attractive option due to its large market and unified regulatory framework.