E92 [AI - Translated] AI Index | Forbes | BLP | CVVC | One-Person Unicorn | Daphne | Cosaic | Planetary

00:00:00: The original podcast was recorded in German.

00:00:03: This podcast

00:00:12: Hello and welcome to Burn Rate, the VC Insider podcast.

00:00:15: I'm speaking here with Guy Gifredi about The Startup Scene With a Focus on Venture Capital.

00:00:20: We've reached episode ninety-two And are recording On Wednesday April twenty second at nine o'clock in the evening.

00:00:26: This podcast is sponsored by our partners RRE Ventures & Wenger Vieli.

00:00:31: Yes!

00:00:32: ARE Ventures has just launched A call for startups For their next event on July eighth.

00:00:37: Pre-seed startups can apply for a pitching slot until May.

00:00:40: third.

00:00:41: You can find more information at www.areventures.ch.

00:00:46: So if you're currently fundraising or know someone who is, please pass this message along so the best start ups can apply.

00:00:52: Yes guy I see went to The Barber!

00:00:54: yes absolutely that was long overdue.

00:00:56: i feel about five kilos lighter now?

00:00:58: I can imagine...I'll tell you im wearing hat today.

00:01:01: of course listeners cant'see that..i'm having bad hair day so won't comment on it.

00:01:06: Guy, what are today's topics?

00:01:27: founder and CEO of CVVC Labs as a guest, And we'll discuss insights from the CVVCE Top Fifty report.

00:01:36: The listener question today is whether one person unicorn can really exist or if it's just a myth?

00:01:42: As always will wrap up with some transactions.

00:01:48: An interesting look at Switzerland comes from the new Stanford AI Index, twenty-twenty six.

00:01:53: The report is considered one of the world's most important snapshots of the development artificial intelligence with figures on talent research investment adoption and economic impact.

00:02:05: And From a Swiss perspective, the headline is pretty strong.

00:02:08: At first, Switzerland ranks number One worldwide when it comes to AI talent per capita.

00:02:14: So nowhere else, measured by population size are there more AI researchers developers and engineers than here.

00:02:22: That once again shows how strong our university and research location is from ETH to the many deep tech related ecosystems.

00:02:31: but The report also shows very clearly talent alone Is not enough.

00:02:36: in private AI investment Switzerland is doing reasonably well But internationally only ranks fourteenth And the picture is similar for newly funded AI startups.

00:02:48: Solid, but not at the top!

00:02:50: Countries like the UK Germany Israel and also Singapore are sometimes significantly more dynamic there.

00:02:58: Translated that means Switzerland is excellent at building AI competence But less strong at turning it into a large number of well-funded fast scaling companies.

00:03:09: For us Of course That's Not A New Insight.

00:03:11: At the same time, it is interesting that the use of generative AI in Switzerland is clearly increasing.

00:03:17: Adoption rates are above the European average and even ahead of US.

00:03:22: The labor market also signals growing demand because share-of-AI related job postings higher than several neighboring countries so one could say foundations there.

00:03:33: The open question simply why more international AI champions not yet emerging from Switzerland?

00:03:40: Guy, is this for you the classic Swiss deep tech story?

00:03:44: So world-class in talent and research but still cautious when it comes to capital scaling and building truly large companies.

00:03:52: Yes unfortunately You can put a bit like that.

00:03:55: The numbers basically confirm something we have been feeling in the scene for quite some time that We have addressed here countless times.

00:04:02: and where?

00:04:02: We keep trying to push for change Switzerland.

00:04:05: We are incredibly good at bringing technologies to life But we find it extremely difficult to consistently translate that strength into major entrepreneurial stories.

00:04:14: There are several reasons for that.

00:04:15: of course, we have an extremely small home market that forces startups to internationalize or think internationally extremely early.

00:04:25: And of course, that does not exactly make growth easier when you then have to expand very quickly into Germany France or the UK.

00:04:33: and secondly this would be a completely different cultural aspect.

00:04:38: we are traditionally strong in research and precision But we are less good at this uncompromising go big or go home mentality, as you know it extremely well in the US.

00:04:48: Or also in Israel for example.

00:04:50: and yes thirdly We simply lack The truly large growth capital especially In the later stages And the result is of course many strong teams a lot Of Know-how which then drains away or gets acquired before It can really scale globally and dominate globally.

00:05:05: Does that mean in reverse, Max?

00:05:07: That Switzerland should now talk less about talent development because we are already very good there and talk more about how to build scalable AI companies faster out of this talent.

00:05:17: Yes exactly!

00:05:18: That is the core.

00:05:19: for me The bottleneck no longer seems to lie primarily on talent but translating it into entrepreneurship financing and scaling.

00:05:28: So How do We Keep Top People In The Country?

00:05:31: How do we get them not only to do research, but also to found companies?

00:05:35: How do create better conditions for larger financing rounds and how do ensure that successful AI companies don't move abroad or get sold too early.

00:05:44: If Switzerland is already world-class in talent then the next step actually has become significantly more ambitious in commercialization as well.

00:05:55: Then we come to a second news item, which is already quite remarkable for the Swiss startup scene.

00:06:02: StartupTicker reports that this year twelve personalities from the Swiss start-up ecosystem made it onto the Forbes Europe thirty under thirty list.

00:06:11: Unfortunately neither of us qualifies anymore.

00:06:14: We are a bit too old right?

00:06:15: Unfortunately not any more

00:06:18: And maybe also Not Good Enough.

00:06:19: Who knows This one.

00:06:20: those lists

00:06:22: The years before and the year Before.

00:06:23: That Also Not Anymore.

00:06:25: Yes, true.

00:06:26: Soon we will have to... I'd rather not say it now!

00:06:30: Yes this is one of those lists where you can say sure it's a media format and ranking but at the same time still quite strong indicator which founders, topics or cities are currently getting attention across Europe.

00:06:48: According to startup ticker, Zurich is actually in second place behind London among the cities where most of the European list members live.

00:06:57: Behind that come cities like Berlin.

00:06:59: so we are ahead of Berlin Paris and Munich.

00:07:02: That's already a strong signal when you consider how much larger some of these ecosystems are.

00:07:08: Overall, there is a lot of deep tech.

00:07:10: A lot of B to be... ...a lot of industrial relevance.

00:07:14: and that's exactly why I found the news interesting because it shows that the Swiss startup scene is being noticed internationally not only in fintech or software but also where real technical complexity and industrial implementation are required.

00:07:31: Guy when you look at this list like what do you read from?

00:07:35: Is simply nice PR for a few founders, or does it also say something about the state of Switzerland as a location?

00:07:42: Yes.

00:07:43: Maybe first of all when I look at the list It doesn't make you proud that we have so many Swiss entrepreneurs on it.

00:07:49: And yes We also know several names on it very well like Aris Who is also on the list and worked with us At one point The co-founder of startup night Alisa Is on it and then we also have someone from burn Pascal Solberger.

00:08:05: And of course, that is

00:08:06: cool

00:08:07: when these people whom you have been following for quite a long time make it onto this list and create international buzz!

00:08:14: So first of all congratulations to all of you also to those I did not mention who we also know well here.

00:08:20: To come back to your question It Is Of Course Both.

00:08:23: The Forbes List is clearly on the one hand always A lot of PR But One Should Never Confuse These Rankings With The Absolute Truth.

00:08:32: They are a pretty good indicator of which regions and which types of founders, currently getting international attention.

00:08:40: And we have twelve people from Switzerland in the startup environment on it... ...and that means yes!

00:08:45: It is no longer simply coincidence or one-off outlier.

00:08:49: The Swiss start up scene is definitely on the International radar and also at Forbes.

00:08:55: What that then says about Switzerland is exactly, in recent years an ecosystem has really matured here at the start-up sector.

00:09:02: One that produces significantly more than just good research which we touched on before.

00:09:07: Switzerland was long known only for its universities and engineering skills as well as technical talent.

00:09:13: And yes!

00:09:13: The actual question was always do companies become internationally visible also emerge from this?

00:09:20: That's what you see right now.

00:09:21: Good technologies are not only being built, but companies with clear applications markets and a story with ambition.

00:09:28: Are also being build out of them.

00:09:30: what strikes me particularly is the type of company's.

00:09:33: these are not pure consumer stories Not lifestyle startups not short-term trend topics.

00:09:40: These are companies dealing technology, infrastructure logistics and automation.

00:09:46: So areas where entry barriers are high and when you cannot simply cobble something together in three months.

00:09:51: that clearly speaks for substance And In the end this substance is exactly what makes a location strong in the long term.

00:09:58: good.

00:09:59: Let's move on to an interesting piece of news from The Swiss AI scene just came in.

00:10:04: The Zurich scale-up BLP Digital has secured US dollars from Goldman Sachs alternatives.

00:10:12: And this is not just another AI financing round, but quite a strong signal for category that's currently gaining massively in importance – AI for real enterprise processes!

00:10:23: I remember well…I met the two founders — they are brothers back at ETH when there were only two of them and we thought for a long time about whether we should invest or not.

00:10:33: And at the time, We were actually already too slow.

00:10:36: things moved forward rapidly so BLP digital has been developing solutions since twenty nineteen that allow companies to automate their ERP and finance processes.

00:10:48: So Not The flashy AI use cases everyone talks About but the operational core processes where large companies lose Time money and efficiency every day.

00:10:59: Specifically, it is about areas such as accounts payable faster closings and better management of cash flow.

00:11:07: And working capital.

00:11:08: the company says that today more than four hundred and fifty corporate customers in over forty countries already rely on the platform.

00:11:17: In addition according to BLP there are more then thirty standard integrations anmore than three hundred ready-to use agents.

00:11:26: Goldman Sachs justifies the investment, among other things with profitable growth strong customer traction and a leading position in AI driven enterprise automation.

00:11:37: Guy Is this simply big financing news for you or does the show very clearly where they are?

00:11:43: i market in that beat to be space is actually heading.

00:11:47: I think he can say this more than just a financing use that we would normally include transactions.

00:11:53: it's also important to understand that this not only primary transaction but mainly secondary transaction.

00:11:59: so goldman sacks acquired shares from existing shareholders here and partly the split, And what we see here is a clear shift away from AI as an experiment and towards AI, as infrastructure.

00:12:13: Investors like Goldman Sachs are now looking much more closely at companies that not only technologically exciting but already deliver measurable value today.

00:12:23: That's exactly what BLP Digital seems to be doing.

00:12:26: They sit on concrete problem in huge market with customers who apparently willing pay for efficiency And from an investor perspective, that is of course extremely attractive.

00:12:38: Yes totally and that's exactly what makes the round so interesting.

00:12:42: it isn't about AI as a vision but about AI embedded directly into existing enterprise processes has to deliver results there.

00:12:53: if company from Zurich with this focus receives fifty million dollars from Goldman Sachs then that is not only a success for BLP Digital, but also a sign that Swiss AI scale-ups are being taken increasingly seriously internationally.

00:13:07: This episode is presented by ARE Ventures the Bernese Business Angel Club.

00:13:13: ARE Venture connects ambitious Swiss startups with experienced investors who offer more than just capital A strong network real expertise and hands on support For The Decisive Early Steps If you as startup want to grow or as an investor want access to the most exciting early-stage deals, then apply for our next event at www.arriventures.ch.

00:13:38: Wenger Vierli – Your Partner Law Firm For Startups.

00:13:42: Whether incorporation financing round or exit startups face complex legal challenges.

00:13:48: Wenger vierli supports founders in every phase of their company with tailored advice on corporate law financing tax matters and IP protection.

00:13:59: Wenger Vieli, your legal counsel for startups!

00:14:02: Let's move to the main topic.

00:14:04: today we go to Crypto Valley in Zug a place that stands for the blockchain and crypto industry In Europe.

00:14:10: like few others.

00:14:11: while many locations have struggled in recent years For talent capital And also regulatory clarity Switzerland has established itself as one of The most stable and relevant hubs And this is also shown very concretely in the latest figures from the current CVVC report, which was published last week.

00:14:29: CVVc has been publishing this report for ten years now and thereby provides one of the most important indicators for the development of Crypto Valley?

00:14:38: Yes absolutely!

00:14:40: The report makes quite clear how strongly Switzerland or rather Crypto valley positioned itself.

00:14:45: over In twenty-twenty five, around seven hundred and twenty eight million US dollars in blockchain venture capital flowed into companies from Crypto Valley.

00:14:53: What is especially remarkable is that this corresponds to forty-seven percent of all European Blockchain funding so every second Venture Dollar invested in Blockchain in Europe landed in Switzerland or in this ecosystem.

00:15:07: That is an enormous concentration and a very strong signal of how relevant the location has become internationally by now.

00:15:26: as is also the case elsewhere in the VC market.

00:15:41: That means capital is flowing more selectively in the crypto sector, as well.

00:15:46: Investors are looking more closely and financing is going primarily to projects with substance, technological depth and real-market connection.

00:15:54: so CryptoValley not only growing in breadth but above all quality.

00:15:59: Yes that fits with general development of location.

00:16:03: At the end of twenty-twenty five, CryptoValley counted one thousand seven hundred and sixty six active companies more than ever before.

00:16:11: Compared with two thousand twenty that is growth of one hundred thirty four percent.

00:16:16: And at the same time The pace has clearly slowed down.

00:16:19: annual growth Is only around one percent.

00:16:21: That too can be read as a sign Of A new phase less in pure build up and boom logic.

00:16:28: The market is becoming much more selective, but also more resilient.

00:16:32: And that's exactly where CVVC sees a sign of

00:16:35: maturity.".

00:16:36: Yes the thematic priorities have shifted in recent years.

00:16:40: Today focus mainly on infrastructure companies financial service providers and technology driven services.

00:16:47: That makes this location particularly interesting politically and economically Because when an ecosystem develops from a growth market into an infrastructure hub, the question automatically arises what is behind it.

00:17:00: Is it regulation?

00:17:01: Is it the density of investors banks and specialized service providers?

00:17:06: Is perhaps also international network?

00:17:08: or is this crypto valley effect that Zug has built up over years especially in environment where Dubai Singapore parts are heavily competing for blockchain?

00:17:18: companies question and that is exactly what we are discussing today with Mathias Rook, our guest.

00:17:26: He is co-founder and CEO of CVVC Labs.

00:17:31: he is an entrepreneur investor and one can definitely say One Of The Defining Voices in Crypto Valley someone who helped initiate many initiatives.

00:17:45: Welcome to Burn Rate Matthias.

00:17:47: Thank

00:17:47: you very much for having me on burn rate this evening, yes

00:17:50: Matt You have been producing the report for around ten years now.

00:17:54: I said it earlier when you look at the development of crypto valley What is the most important change?

00:18:00: For you in recent years?

00:18:02: and Is the industry clearly more mature today than It was a few years ago?

00:18:07: so In one sentence or even in one word i believe what has really changed And only in The last One Or two Years i would say is in one word, legitimacy.

00:18:16: That means for a long time crypto valley and crypto were not something everybody liked.

00:18:20: there are actually these two camps.

00:18:22: on the one hand I would say There Are Those Who Say This Is A Technology i am now speaking about The Beginnings In twenty thirteen fourteen fifteen that has the potential similar to the internet thirty years ago To generate growth For The Next Few Generations.

00:18:38: Then There Is The Second Level Which Was Much More Visible.

00:18:41: That was the speculation level and that was Bitcoin, crypto all these asset speculations.

00:18:46: And that is why I believe for a long time it was of course not perceived.

00:18:50: the way can partly work in terms of infrastructure as you mentioned.

00:18:55: If you look back we started in twenty sixteen.

00:19:00: Twenty eighteen was the ICO craze.

00:19:04: The attitude was really like, yes Silicon Valley has moved it is now called Crypto valley and anything as possible.

00:19:10: The pioneers were there back then.

00:19:13: at the beginning we did not yet have a blockchain focus.

00:19:16: in that sense i think We looked at a thousand projects At the beginning In one year And most of them ninety nine percent Were Not worth talking about.

00:19:25: but Then There were two or three where you said okay?

00:19:30: And Switzerland naturally benefited from that.

00:19:33: People realized early on, okay this needs regulation or a framework.

00:19:37: I would say there was a group that said let's make sure we have smart regulations.

00:19:43: then Libra came?

00:19:44: That was actually still early when I think back on it.

00:20:00: And then came the consolidation years a bit, so... Actually you always had these crypto winters but i think with Terra Luna in twenty-twenty two and later FTX that was massive!

00:20:11: That really hit the industry hard costed a lot ...and since then in twenty three regulation really picked up.

00:20:19: Europe developed a regulatory framework.

00:20:22: Later came institutional adoption in twenty four with ETFs Huge topic.

00:20:27: And now I think you summarized it well.

00:20:30: It is really this infrastructure, the financial market infrastructure is being replaced partly with blockchain tokenization a huge topic.

00:20:39: what i also find exciting Is that the topics repeat themselves.

00:20:42: so every year we Also do large events specifically on digital assets and This industry and tokenization.

00:20:50: That was the big topic from The very beginning.

00:20:52: Then it kept coming back.

00:20:54: Real-world asset tokenization is what it has called

00:20:56: today.".

00:20:57: Back then, It was maybe real estate but the actors are changing.

00:21:00: so at our last summit in Zurich... ...it's no longer some startup from Western Europe speaking about tokenisation But someone from UBS and that is new And I believe that describes this legitimisation quite well and shows where the industry has arrived to

00:21:16: date.

00:21:18: If we look a bit of numbers The combined valuation fell in twenty-twenty five to around four hundred and sixty seven billion US dollars after about six hundred billion.

00:21:30: In the previous year.

00:21:31: how do you interpret this decline?

00:21:33: is it a cyclical correction or purely as structural revaluation?

00:21:41: These are the halving cycles of Bitcoin.

00:21:43: Every four years, the reward is halved and that usually had an effect on the bitcoin price.

00:21:48: And because Bitcoin makes up the largest part of cryptocurrencies or tokens That always naturally pulled the whole market along with it.

00:21:56: People were uncertain.

00:21:57: now With institutional adoption Will this happen again?

00:22:02: It remains structural.

00:22:03: So I would say to come back To your question It is probably a correction and revaluation in the sense of cycle effect or reporting data fact.

00:22:13: We have two groups here that make up this value.

00:22:15: On the one hand, we have the listed projects with tokens.

00:22:19: The CoinMarketCap is the twenty-five largest token project and then the twenty five largest private

00:22:24: projects.".

00:22:25: With the Token Projects if you look at that I think Ethereum and Solana are probably making up ninety percent of these four hundred sixty seven million.

00:22:35: One also has to say that fairly... The companies that are not publicly traded, of course much fewer in number and also much smaller value.

00:22:46: What should be mentioned structurally on the private side?

00:22:50: Twenty-one shares an ETF provider from Switzerland was bought by Falcon X in

00:22:55: U.S.,

00:22:56: therefore falls out.

00:22:58: our valuation criteria is no longer included.

00:23:01: It had a nice market capitalization then so it really.

00:23:06: And today the macro environment also matters to a certain extent for cryptos.

00:23:12: For the larger ones, so interest rates geopolitical situation risk of sentiment and so on that is reflected as well like with tech stocks.

00:23:21: you can see that too.

00:23:22: but if you then look at bit more closely what I simply find with these projects With the protocols, most listed projects are protocols that means infrastructure providers.

00:23:33: And there it matters who did their homework right?

00:23:35: They usually sit on a lot of treasury and partly they do not manage at all or then they managed very well.

00:23:42: one could also say reserves.

00:23:47: they are actually not fundamentally bad.

00:23:49: So how active is the community?

00:23:51: Is the community growing, is the developer community also growing?

00:23:55: Are there applications or their use cases other transactions?

00:23:58: Is that TVL and so on?

00:24:00: And those have not actually gone down.

00:24:02: That's why I would say The Cycle.

00:24:05: so this reporting date effect at the end of the year where we simply take the numbers now for the listed projects i would say that is larger.

00:24:13: yes exciting uh... from the European blockchain venture capital share flows into Switzerland or into Crypto Valley.

00:24:27: What does this position say about the international competitiveness of the location?

00:24:31: You know, I think that is a very good question and it does say something but perhaps not what most people think.

00:24:37: Switzerland early on with The Blockchain Act made small adjustments to the regulatory framework communicated early how they saw it and also positioned themselves by categorizing tokens.

00:24:50: That really triggered a network effect which then led to the ecosystem growing very quickly, if you look at what such an ecosystem needs first of all is talent.

00:25:00: so projects came in droves when money followed.

00:25:04: that happened strongly in Switzerland during this first hype good infrastructure, companies service providers office space.

00:25:14: What do I know?

00:25:15: all kinds of things?

00:25:16: And then you need regulation and also a government that supports

00:25:19: it.".

00:25:20: That was the case then.

00:25:22: today less so.

00:25:24: certain gaps in legislation simply have not been closed.

00:25:26: yet.

00:25:27: In some areas Switzerland is now actually lagging behind global regulations.

00:25:32: others have caught up.

00:25:34: You mentioned UAE US selected MICA Europe locations Germany really very good, the Netherlands.

00:25:42: There are many that have now caught up and I believe what does have an effect especially in this geopolitically uncertain phase is the fact Switzerland stands for stability and legal certainty it has its price.

00:25:55: but if you can afford to set-up your apparatus perhaps now precisely sea level apparatus and governance of these projects here then there's a signal or something long term.

00:26:07: I think those are decision paths that are taken in this way.

00:26:11: In terms of growth, one also has to be fair and say there is a huge deal included with the tonne token from Telegram.

00:26:19: They did a huge round this year.

00:26:21: compared now with previous years or maybe before.

00:26:25: This lead over Switzerland was not quite as big.

00:26:29: Yes very good!

00:26:30: Now let's switch it over for you as an investor.

00:26:35: You have several funds running.

00:26:36: We've already discussed this a bit before as well, what do you pay attention to as an investor in blockchain startups differently than classic startup venture cases that we all look at?

00:26:46: So I said at the beginning that there are actually two camps or two groups in this scene and, in this industry, the speculation topics.

00:26:53: And then these long-term technology focused investment fields.

00:26:57: We're also not a crypto VC.

00:27:01: These crypto VCs became big our hedge fund strategies with listed tokens.

00:27:07: we have always seen ourselves invested according to classic VC approach in blockchain tech stack connection other technologies.

00:27:16: That means we are equity first, which does not mean there are no tokens or that tokens will then come with these projects.

00:27:25: And what we also did not do was invest in this infrastructure project's in the layer one blockchains because they're simply too many of them and their always have been to money on the consolidation would be disproportionate.

00:27:38: it is already fully underway now.

00:27:45: Earlier, right at the very beginning.

00:27:47: what was different for example?

00:27:49: The core question we always asked ourselves is does this actually need a blockchain?

00:27:54: because it's similar to AI today.

00:27:56: If you still stick the AI sticker on your startup then you get more attention.

00:28:01: It was exactly same earlier with Blockchain.

00:28:04: so why are using technology at all?

00:28:07: That has faded somewhat into the background over time, because technology itself also moved in to the back ground and use cases became clearer as why it makes sense.

00:28:18: But if tokens then came into play for us – they usually come into play – we make equity investments with a token model alongside that.

00:28:27: Then you received a warrant where at an event of a launch, you simply receive tokens.

00:28:32: And always important is where value was created!

00:28:36: So if you have two stakeholder groups, if you shareholders investors who are shareholders and token holders where is value created?

00:28:44: And how do you balance that.

00:28:46: Where does the value increase of this project ultimately land.

00:28:49: I have to say almost never seen it done well.

00:28:52: It's incredibly difficult usually a very high level complexity.

00:28:57: And if one perhaps breaks that down to the tokens now, what do you have to look at there?

00:29:01: I mean, the special thing is of course.

00:29:03: If you bring tokens into play and want to build a large user base millions of users You are actually building a small economy Yes!

00:29:11: And you create incentives and rights and so on.

00:29:16: That becomes very complex Very quickly.

00:29:18: Of course we looked at that carefully as well As we could.

00:29:22: I also have to say that many projects with us went through our own accelerator.

00:29:26: And because they were still so early in the stage, often only after the accelerator did they decide which technology stacks they would use?

00:29:34: So they entered the race quite openly there and then of course winners appeared earlier than certain playbooks established themselves.

00:29:43: But I think the fundamentals always remain the same and those are the same ones that others also apply.

00:29:48: Yes, you mentioned twenty-one shares earlier.

00:29:51: what does it take today in your view for a blockchain startup in Switzerland not only to be founded but also to survive long term?

00:29:58: And stay here?

00:29:59: so i do think switzerland has structural deficits Not Only In Our Industry.

00:30:04: You Know That Too.

00:30:05: There are simply certain things that compared with other situations and jurisdictions, so disadvantageous.

00:30:11: they then lead to fewer really huge companies in Europe.

00:30:16: But it is this topic of quality long-term thinking and legal certainty I think developing a bit in the direction of infrastructure hub trust.

00:30:28: I am here, I have a large ecosystem and I want to manage it from this hub in Switzerland.

00:30:37: but that is clear only if regulation keeps up.

00:30:39: so there are still big issues now which aren't clearly addressed.

00:30:44: well then i do not think they can hold on long term.

00:30:48: That's really the case with blockchain areas as you perhaps look at the project's twenty-one shares Because these projects are often in this crypto bubble, so often also based on a protocol grants were awarded.

00:31:02: That means you basically get free money You develop then you have a user base that is Also In your bubble?

00:31:08: That also speaks Your language which no one else Speaks.

00:31:12: Then you may Have customers who Are also from This bubble and partners From this bubble And suddenly you grow up and realize There Is A world out there.

00:31:20: I actually have to build These things for them.

00:31:22: And then you lack these networks.

00:31:25: We have seen that often, also know them.

00:31:27: they have no VC connections and then after three four years They stand there and do not even know how that works?

00:31:35: I find very simple whoever does Not Have a good use case and No Good Utility will probably not survive either.

00:31:43: Yes Matt let's briefly look into the future.

00:31:46: if You Look two to Three Years Ahead Where Do You See The Biggest Opportunities for Switzerland?

00:31:51: So now again, with reference to our industry I would say there is a lot happening.

00:31:57: Fundamentally what probably concerns all of us... ...is this speed which AI is being hammered into all software and digital products from A-Z.

00:32:06: And What i actually want to say in first place or what will be nice Is that Switzerland should actually be blockchain & AI hub.

00:32:13: If you look at where it comes from, what we have here the ecosystem.

00:32:17: The universities, the talents, the Googles now also anthropic and so on I am simply not that confident.

00:32:24: That is something that really concerns me whether We can actually capture this huge opportunity.

00:32:29: But actually Switzerland should take an absolute leadership position Here in these topics.

00:32:34: the whole Gen Tech economy Where both are married.

00:32:38: Blockchain is actually really ideal to be this backbone technology and provide accountability, trust layer.

00:32:44: All of that screams for these technologies.

00:32:48: so... That would my wish!

00:32:51: Maybe I'll put it this way?

00:32:52: Realistically speaking, Switzerland has good chances as an infrastructure hub.

00:32:57: This there's already a replacement happening in financial market infrastructure….

00:33:02: These T-Zero systems will be blockchain based.

00:33:05: Which ones we do not know.

00:33:07: That will become clear.

00:33:09: There is a battle going on now, which also exciting what it's almost given.

00:33:14: Switzerland should actually be a hub for financial applications institutional financial application here to.

00:33:21: unfortunately I am not confident or not too confident because i believe switzerland and especially the current government do not want that at all Because they are still damaged by credit suise if one can put in that way.

00:33:34: And perhaps then the two most obvious ones, tokenization.

00:33:37: The word I can almost no longer hear it.

00:33:39: let us simply say digitization of the financial industry.

00:33:43: that is simply coming now.

00:33:44: That is simply happening Now.

00:33:46: i am not sure whether one Can still catch up with what?

00:33:49: The u.s and other countries are doing and how investment Is now being made there Of course.

00:33:53: and stablecoins the big topic in blockchain.

00:33:56: With the current regulation switzerland has absolutely No chance.

00:33:59: they're also a swiss franc stablecoin globally.

00:34:02: That is simply too small, that does not work.

00:34:05: There are specialized use cases one could open up and say Switzerland is an issuer of stable coins for every kind but I currently do NOT see Switzerland moving in this direction either.

00:34:17: so a mixed bag i would say.

00:34:19: there are good opportunities and then some that i think unfortunately our simply being missed.

00:34:24: hey matt thank you very much for the conversation your time.

00:34:29: For coming to us here in the burn rate studio late in the evening.

00:34:33: a very exciting to hear your assessments of the report on the maturation of the market, and of course also switzerland's role in international blockchain environment.

00:34:42: we're definitely excited see how crypto valley will continue develop.

00:34:47: Thank you very much and continued success.

00:34:49: And

00:34:49: thank.

00:34:56: It was founded by Matthew Gallagher, who according to the article in The New York Times built up his company with AI.

00:35:20: Very few people and extremely little starting capital!

00:35:24: He is said to have built Med-Fi in just two months with around twenty thousand dollars in startup costs... ...and with help of more than a dozen AI tools.

00:35:35: What's so remarkable about this?

00:35:37: Gallagher apparently implemented a large part of what you would previously have needed an entire team for using AI.

00:35:44: So code for software, texts for the website images and videos for advertising in customer service internal analyses and automations.

00:35:53: For everything he could not do himself.

00:35:55: He brought in external partners selectively The actual medical infrastructure, so doctors prescriptions shipping compliance ran through specialized platforms such as care validate or open loop.

00:36:09: And the numbers are of course what make everyone sit up.

00:36:12: med-fi is said to have gained three hundred customers in the first month another thousand in the second month and already made four hundred million dollars in revenue in its first full business year.

00:36:27: for this year, they are said to be on track.

00:36:29: For one point eight billion dollars in revenue and that with just two internal employees Matthew Gallagher himself And later his brother Elliot whom he hired as the only permanent employee.

00:36:41: of course That fits perfectly With a thesis that one has been hearing more and More often four years that AI not Only makes individual jobs more productive but also shrinks The organization itself so you can build.

00:36:53: companies used to need fifty, one hundred or five-hundred people and today perhaps One Founder an AI stack a few contractors.

00:37:03: And some specialized platform partners are enough.

00:37:06: But the case is not only a success story.

00:37:09: In The New York Times article, it also becomes clear that the whole thing has its downsides.

00:37:14: Med-Fi had problems with customer service... ...the chatbot said to have invented prices and offered services that did not exist at all!

00:37:36: why Serge's question is so exciting.

00:37:38: Are we seeing the future of startups here?

00:37:41: Ultraline, AI first almost without employees or is Med-Fi more an extreme special case that only works under very specific conditions?

00:37:51: Guy, when you look at this MedFi case is it proof for you that AI actually enables a new category of companies?

00:37:59: So companies with one or two people reach revenues on the scale which entire organizations used to be needed.

00:38:06: Or more spectacular outlier...

00:38:09: Yes, I mean one can say it is definitely proof that it can work like this.

00:38:13: But on the other hand of course It Is also an outlier.

00:38:15: An outlier in the sense That it makes something real visible Namely that AI Can really brutally leverage The productivity Of individual founders.

00:38:25: If you have someone who is technically top-notch Makes decisions quickly Is strong In marketing And combines the right tools Then such a person Can move things today.

00:38:33: That would've been impossible A few years ago.

00:38:36: But the key point is Med-Fi's not simply one person with a laptop behind the model.

00:38:41: There are platforms for telehealth, doctors, pharmacies logistics external agencies law firms and contractors behind it.

00:38:50: that means the company looks ultra lean internally but externally accesses a lot of infrastructure that already exists in the market And so It Is Not Simply A Magical Solo Case But Rather Radically So To Speak unbundled company that outsourced everything and simply found a good central point in the network, built itself out from there.

00:39:11: Still one can say this case shows something important – The threshold at which you build a serious company is falling massively so… Earlier.

00:39:20: for such start You would have needed significantly more capital Very likely several million x number of people And much time before you could even get to market.

00:39:30: Today, you can build that extremely quickly with AI.

00:39:33: Test it then launch it optimize and scale It.

00:39:37: my thesis is therefore if we see more such Extremely small extremely efficient companies that choose another Such niche such a central network point And really our one-person unicorns That's rather secondary in view.

00:39:51: The real change is that companies with mini-teams can suddenly reach a scale, which used to be reserved only for classic startups or already companies with effectively very large and high headcount.

00:40:02: Yes what I find exciting about MedFi?

00:40:05: on the one hand it's an almost unbelievable efficiency story.

00:40:08: On other hands of course you also see risks so hallucinations in support questionable advertising then resulting regulatory pressure perhaps exactly the downside of the model, that you grow extremely fast with a minimal team but governance quality control and also accountability eventually lag behind.

00:40:30: Yes absolutely!

00:40:31: You hit the nail on the head here... And I think that is the core of the debate.

00:40:35: AI today brings speed extremely cheaply and makes this speed possible in the first place But it does not automatically make the responsibility that companies carry better or easier Especially in areas like telehealth, where you are dealing with health medication claims and customer data.

00:40:54: It is of course extremely sensitive especially when an AI still tends a little toward hallucination And does not always give correct statements.

00:41:04: if You have a very small internal team so a small headcount also In management then you often lack exactly the classic control mechanisms that Are extremely important in this area compliance, quality assurance the four eyes or even sometimes eight-eyes principle which is standard in the industry review loops.

00:41:23: And then also people who say hey wait a minute we cannot put this live like this at all.

00:41:28: technically brilliant but regulatory basically suicide and accordingly One person alone can be incredibly fast, but they are also the single point of failure.

00:41:37: if the system then makes a mistake or is simply set up a bit incorrectly.

00:41:40: That can immediately have very large consequences and Med-Fi actually shows exactly that incredible growth momentum was achieved by this tiny team But there were friction at places where companies with more employees and not only performance marketing plus software simply have control mechanisms.

00:42:00: And if you are in regulated markets, then you need not only the speed but effectively robust processes documentation allocated responsibilities and You have to build great trust.

00:42:11: that is why my answer Is AI can reduce headcount?

00:42:14: But it does not eliminate the need for control.

00:42:17: Max is the more exciting insight here, perhaps not that we will soon see masses of billion-dollar companies with one person but Yes, that

00:42:37: is actually my take too.

00:42:38: You recognize that well?

00:42:40: I think the term one person unicorn Is an extremely good narrative but perhaps not The most precise description of what is really happening.

00:42:48: What we are probably Actually seeing it's Not the abolition Of companies as organizations But the massive compression of early phase.

00:42:55: In the past the path was often idea Fundraising building a team Developing product go to market and then hopefully first revenues.

00:43:04: Today, in some areas you can start much more directly.

00:43:08: A founder with AI can build branding test landing pages run ads automate customer support iterate products and generate first revenues without immediately hiring an entire crew.

00:43:21: MedFi is a extreme example of this.

00:43:23: but precisely because it's so extreme It shows the direction More output per head less friction lower fixed costs more speed.

00:43:32: Only the larger and more sensitive business becomes, The less pure tool power is enough.

00:43:38: Then it's about trust regulation crisis management quality And also customer relationships.

00:43:45: For that you usually do need people again only probably later and more targeted than before.

00:43:52: So my answer to Serge would be yes, AI will lead many more small teams being able build very large companies.

00:43:59: But the real one-person unicorn will probably remain of an exception than new norm.

00:44:05: The Real Revolution is not a company entirely without people but it has to hire much later.

00:44:22: Let's start in Romandy with Daphne Technology.

00:44:25: It is a Swiss climate tech company based in Ekublenz and has now communicated the first closing of its new financing round, with more than fifteen million Swiss francs.

00:44:35: The Round is led by Taranis.

00:44:37: In addition Shell Ventures & Trafigura already existing investors are also on board.

00:44:43: This is an exciting growth round because it's not primarily about research here, but about accelerated commercialization.

00:44:50: Yes, Daphne technology is developing slip-pure a system to reduce methane slip meaning unburned methane in the exhaust gas of natural gas engines.

00:44:59: this exact problem is particularly relevant in compressor stations and other gas infrastructures Because existing exhaust after treatment systems are often not sufficient there.

00:45:09: Technologically Daphne uses a plasma catalytic process intended to strongly reduce methane without having to modify the engine for it.

00:45:16: The target group is mainly midstream and upstream gas operators so companies with large fleets of compression and gas engines in perspective shipping infrastructures.

00:45:27: power players are also added Everywhere natural gas engines are used and methane emissions becoming increasingly difficult from a regulatory and reputational perspective.

00:45:39: A field demonstration is already currently running with the leading US midstream operator.

00:45:45: Yes, what I find particularly exciting here above all of timing.

00:45:49: Methane emissions are currently coming under massive regulatory pressure in the US through The Clean Air Act and Europe, through EU ETS.

00:45:57: In addition to new generation of methane satellites which can analyze methane gas concentrations more precisely enormously increases external pressures on operators.

00:46:08: Daphne is therefore positioning itself so that they're not selling a nice-to-have climate tool but solution for problem suddenly becomes measurable visible and financially relevant.

00:46:21: That is exactly why the round-is more of a bet on regulatory driven market adoption than pure technological

00:46:27: curiosity.".

00:46:29: The fresh capital flows mainly into three areas, building production capacity in

00:46:34: U.S.,

00:46:35: further product development.

00:46:40: That shows very clearly where the company stands, no longer in the lab but in the phase when installations service capability and industrial implementation determine market success.

00:46:53: Let's move to the second transaction.

00:46:55: Cossack is a Swiss food biotech startup And has now closed a seed extension of six million dollars.

00:47:03: According to the company this brings total capital raised so far To twelve point five million dollars.

00:47:09: The company is currently in the pre-series A phase and it's preparing for market entry in US next year.

00:47:16: Yes, Corsic is developing a new category of yeast based food ingredients that are produced through fermentation.

00:47:21: The exciting point is that product isn't intended to replace only single ingredient but cover several functional properties at same time such as creaminess stability formulation functionality.

00:47:34: with that Corsac addresses central problem where today several additives are often needed to achieve exactly these properties in a product.

00:47:44: Yes, the customers are mainly food and beverage manufacturers who are interested in better functional ingredients for their formulations.

00:47:53: this is particularly relevant for companies that want to develop products with clean label good sensory properties.

00:48:01: In addition, there is already initial commercial validation through the partnership with Ingredient a large ingredient house that has been supporting COSIC in go-to market since the end of twenty twenty five.

00:48:12: And what is exciting about The Round?

00:48:14: Is both strategic and traditional.

00:48:16: VCs are involved DSM Fermanic Ventures so the venture arm over global nutrition an ingredient group participated.

00:48:25: Kickfund invested, as did Swiss family offices.

00:48:28: Existing investors such as Navers Ventures and ZKB also invested again.

00:48:33: The fresh capital will flow into three areas regulatory work scaling production and industrial trials with major customers.

00:48:42: That is typical for this level of maturity because now it is no longer only the technology that counts but proof that the product becomes market ready from a regulatory, operational and commercial perspective.

00:48:55: Strategically it is therefore about moving

00:49:18: and total financing now amounts to thirty-two million Swiss francs.

00:49:22: Planetary is building a full stack fermentation platform, so not just single product but the entire value chain from bioprocess design to scale up an industrial production.

00:49:34: at the center.

00:49:35: it's idea of converting agroindustrial side streams for example from sugar industry into higher value proteins fibers enzymes using its own technology.

00:49:47: Strategically, I am told that is very exciting because Planetary is not only selling food products but also wants to act as a technology and infrastructure layer for the fermentation industry.

00:49:59: And customers are divided into two groups.

00:50:03: on one hand Planetary works with agro-industrial partners As you mentioned sugar companies so The Sugar Industry To whom the technologies to be licensed And on the other hand, with its BtoB brand Libre Food.

00:50:18: The company addresses manufacturers in areas such as alternative meat or dairy products Or also hybrid products, fiber enrichment and protein fortification.

00:50:29: In addition there is it's own commercial traction in retail for example With vegan micro-protein fillets that they sell at Aldi Switzerland.

00:50:37: What is exciting here, the breadth of the investor syndicate because it reflects planetary strategic positioning very well.

00:50:46: The round was led by Radical Capital and Whitaker Ventures.

00:50:50: Others joining included Royal Coson, ARC Investors, Green Generation Fund, Agri-Food Tech Venture Alliance, Astonor Ventures and Ex-Ange.

00:51:01: That is interesting because not only classic VCs are investing here but also industrial and strategic partners from across the entire value chain.

00:51:10: that a clear signal that Planetary has understood as an infrastructure and licensing model for the fermentation economy.

00:51:19: Yes, and the fresh capital is now intended to flow mainly into the global scaling of fermentation infrastructure.

00:51:26: And into expanding the licensing model.

00:51:28: at the same time planetary wants to further advance the industrial commercialization Of its ingredients and products in Europe and expand international partnerships for example In raw material rich markets like India they mentioned.

00:51:42: so The company is clearly focused on establishing itself as a central technology layer For the fermentation economy.

00:51:48: So that was it with Burn Rate, the VC Insider podcast.

00:51:52: If you want to support our podcast subscribe to our newsletter and share in your network.

00:51:57: Thank you very much for listening.

00:51:58: we wish a nice weekend.

00:52:00: take care and bye.