E100 [AI-Translated] 100x Burn Rate | Swiss Deep Tech Report | >>venture>> | OpenAI | Anthropic | GR3N | ZAAN | SCAIT

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

00:00:03: This podcast was translated using Artificial Intelligence, Burnrate the Venture Insider Podcast with Max Meister and Guy Gefredi.

00:00:12: Hello!

00:00:12: And welcome to Burnrate – THE VENTURE INSIDER PODCAST.

00:00:16: I am sitting here talking about the startup scene on venture capital.

00:00:21: We arrived at episode one hundred and we are recording on Wednesday, the seventeenth of June.

00:00:26: At nine p.m in the evening this podcast is sponsored by our partners Omnium Upscale dot C H Wenger Vili And Our Adventures Guy.

00:00:35: what Are Today's Topics?

00:00:37: Episode One Hundred.

00:00:39: Before we discuss The most important news Of the week as usual today dive into the deep tech report twenty twenty six published today with Andreas Punter And look at the deals of The Week.

00:00:52: We are using episode one hundred as an occasion to briefly Look behind the scenes Of Burnrate.

00:00:59: How did the podcast come about?

00:01:01: What has changed since the start, how do our episodes actually Come together and why Are we still doing this every week after One Hundred Episodes?

00:01:09: Exactly Episode one hundred is a good moment To look back.

00:01:14: When we started with the first episode After the summer holidays in twenty-twenty three Burn rate was still quite different from today, but the idea behind burn rate is already the same.

00:01:25: First, we wanted to create more transparency in the venture ecosystem by addressing valuations and contextualizing financing rounds and exits.

00:01:35: Something that is otherwise very rarely done outside of the regulars table or The Grapevine as one also says.

00:01:42: sharing our know-how from over twenty five years combined Inventure Capital with the Ecosystem.

00:01:47: That was Very Very Important To Us.

00:01:50: And last but not least, and this is then of course a more self-serving goal.

00:01:55: We stay on top of our knowledge and are always informed about current topics and trends.

00:02:00: I personally find that of course great because it forces us every week to gather the news hold an editorial meeting... ...and there we discuss many exciting topics and can then decide which topics we include.. ..and we then go deeper into those.

00:02:15: at the start burn rate was still very international.

00:02:19: Our listeners told us very quickly that financing rounds in Switzerland, investors here in the country cap tables in Switzerland are actually more interesting to them.

00:02:28: So in short season one was certainly an experimentation phase with founder interviews.

00:02:34: we had made recordings in a different studio back then and then edited very laboriously ourselves.

00:02:40: Maximilian, our co-host cut that himself!

00:02:43: And that was of course incredibly time consuming... ...and we had very much positive feedback but on the other hand also very long production times from season two.

00:02:55: We then professionalized format with Riverside a provider, we published weekly.

00:03:01: We had first sponsor inquiries and then brought in someone for professional editing.

00:03:06: who does that to us?

00:03:11: In season three, the current format then came into play.

00:03:14: The transaction of the month episode new partners more guests... ...the upscaler miniseries and the first live podcast.

00:03:21: quite a journey I would say.

00:03:23: um i can still remember well the first podcast we recorded there in the studio with Henning & Alex.

00:03:28: that was still exciting.

00:03:29: There I effectively-I mean.. ..i am on stage alot but there I effectively had something like stage fright And I still remember I stumbled over my words so much simply because it was somehow Broadcast live.

00:03:42: that was also quite special at the time.

00:03:44: now episode one hundred looks completely different.

00:03:47: i think we have developed ourselves very well there in a hundred episodes, comes to over three billion francs in Swiss ventures.

00:04:06: And yes, we are actually asked again and again how we arrive at certain figures because they are apparently very accurate.

00:04:13: the answer here is very important.

00:04:15: We're not violating any NDA's ,we only use publicly accessible information for the cap table reconstructions .We research thoroughly of course compare certain sources calculate backwards check register data press releases, and also investor disclosures.

00:04:32: And then we reconstruct the cap table.

00:04:34: that is sometimes detective work but we are often almost exactly spot on.

00:04:39: one can say that

00:04:40: with exits it is similar.

00:04:42: We have illuminated around fifty Swiss Exits With a combined deal volume of more than six to seven billion Swiss francs.

00:04:49: Those are quite handsome returns to the investors.

00:04:52: Unfortunately The major investors were mostly from abroad.

00:04:55: One has to mention That as well Of course.

00:04:58: Among the transactions are, for example, exits like Nexthink, RRS, Biotech, Limatech and others as well.

00:05:04: We have also done some deep dives with Yokoi where we spoke to various investors in preparation of this episode.

00:05:11: We find that contextualization of exits whether good or bad is very important since within an exit one cannot automatically assume everyone won!

00:05:21: On this topic we just had a interesting listener question.

00:05:26: This contextualization is important because headlines alone often do not tell the whole story.

00:05:32: Perhaps we should also briefly explain how a burn rate episode actually comes together, from the outside.

00:05:38: that might look as if Max and I sit down briefly press record.

00:05:46: We effectively have a sheet for every podcast that we compile during the week.

00:06:00: When you ask them three days in advance and I find that already exciting.

00:06:19: Max, when you look back a little on this journey what has pleased you most about burn rate?

00:06:24: Definitely

00:06:25: the intellectual joy.

00:06:26: as news junkie eye of course enjoy discussing the most exciting topics In The Market with You Every Week.

00:06:33: Burn Rate forces us to stay On Top Of Things.

00:06:36: We have To Know Which Financing Rounds Have Taken Place which Exits Are Relevant Which Topics are Being Discussed And What Is Really Behind Them.

00:06:45: And of course, I am pleased that burn rate has by now become a well-known medium in Switzerland.

00:06:51: Well we should not stack things too high but there are many loyal listeners such as you almost feel.

00:06:57: We must not disappoint them!

00:06:59: It is similar for me.

00:07:00: what pleases me particularly Is the interest from the ecosystem and yes By Now also From further afield.

00:07:07: so Not only The Listeners who come from the venture scene.

00:07:10: What i Also find great?

00:07:11: We receive So Many listener Questions & Feedback inputs and sometimes also tips about transactions.

00:07:18: That of course always helps us too, I would not have expected that from the start if someone had told me that three years ago because i already mentioned it.

00:07:27: When we approach people for a main topic, I find it extremely cool that the reaction is so overwhelmingly positive.

00:07:36: And yes come absolutely.

00:07:37: i do not care!I will push some sports event on the evening and come to your burn rate studio.

00:07:43: That shows already that Burn Rate has become a relevant channel at least in our ecosystem.

00:07:48: What was then the biggest surprise?

00:07:50: I

00:07:50: would say how many loyal listeners we already have now.

00:07:53: Sometimes over a thousand listeners per episode, that is enormous in my eyes.

00:07:58: and what also surprised me was at events one suddenly recognised an approach about the podcast of course especially industry events... ...I am still quite glad not exactly real celebrities who get approached on the street and suddenly have fans!

00:08:18: Max, what other exciting facts have we looked up?

00:08:21: Interesting for example is how internationally burn rate is already being listened to.

00:08:26: Around seventy percent listen us from Switzerland followed by the USA and Germany.

00:08:32: In total, burn rate would already be listened to in one hundred and three countries on all continents.

00:08:39: The question remains why do we actually still do burn rate?

00:08:42: One evening per week that we could spend on sports events or with the family?

00:08:47: I Would say firstly it is simply still a lot of fun To discuss the latest topics of the venture scene together With you.

00:08:54: Then because we, or at least I always learn a great deal through the exchange.

00:08:59: Through their preparation and yes thirdly also Because We Notice That In The Swiss Startup Ecosystem And Venture Ecosystem There Is A Genuine Need For Contextualization And Know-How And that exactly is what our listeners appreciate.

00:09:14: there are Yes Many Press Releases On LinkedIn Deal Announcements But Often The Context Is Missing.

00:09:24: Who is behind it?

00:09:25: What does the valuation mean and what is actually happening in the market.

00:09:29: And exactly there I do believe that we make an important contribution with burn rate.

00:09:34: And in conclusion, burn rate season four starts after the summer holidays.

00:09:39: We are already fully in planning!

00:09:41: In terms of format we will presumably not make any major changes because the current structure works well... ...we'll continue to invite first-class guests who create real added value deliver contextualization and perhaps also work more strongly with live formats.

00:09:59: Again, that is very possible and there will certainly be some surprises too.

00:10:03: We are planning for example a live event in Bern And who knows maybe someday they'll also burn rate merch.

00:10:09: Maybe you would then buy a cap or hoodie with this new logo.

00:10:14: Let us know.

00:10:15: In the spirit thank to all of your listeners.

00:10:17: Please share Burn Rate and our announcements again Recommend it further Yes!

00:10:22: Also send us criticism or positive feedback.

00:10:24: Questions you can as always send to podcast at burnrate.ch or of course, approach us about it at events.

00:10:30: without you we would certainly not have been recording burn rate every week for one hundred episodes and continuing to do so.

00:10:37: And also a thanks to Lawrence For The Cutting.

00:10:39: It is Always On Time.

00:10:40: We very much appreciate the collaboration.

00:10:43: Very good!

00:10:44: Let's continue in the program.

00:10:45: We start with the news and one person who has accompanied us since the very beginning is SBF or Sam Bankman-Fried, the FTX founder.

00:10:56: Very exciting to follow his development... His investments that he made.

00:11:00: And what is exciting?

00:11:01: I just have to briefly say this once again This week SpaceX announced acquisition of Cursor the company cursor, and in fact SPF meaning SAM.

00:11:11: In year twenty-twenty two with Alameda invested two hundred thousand dollars But unfortunately, the bankruptcy administrator of FTX returned to stake back then at nominal value.

00:11:34: So not a nominal value I must be precise... ...at the participation value.

00:11:39: so two hundred thousand simply.

00:11:41: he got that back then and that is already crazy when you think about it!

00:11:46: I think the most successful investor of the last twenty years in the USA and he is sitting in jail.

00:11:53: That's simply unbelievable, this story especially that his story no longer being picked up on media.

00:12:00: That is already crazy, right?

00:12:01: I mean when you look at his holdings what he all bought.

00:12:04: that is unbelievable.

00:12:06: He just had such a good nose and then everything fell apart.

00:12:09: of course i do not want to say anything here about his actions... ...that is NOT my place!

00:12:13: I mean he was probably rightfully convicted but his investment activity is really incredibly good.. ..and one can see that now of course when these companies are sold after few years or go public....

00:12:23: And he does have a lot of time now and that would be great role in jail.

00:12:26: uh to be something of adventure partner for a few funds and scan the best deals.

00:12:31: Indeed, already crazy!

00:12:33: I did not say that.

00:12:33: so his stake would be worth three billion today... Three billion?

00:12:38: Yes!

00:12:39: Anyway let us go to Switzerland namely The Venture Awards.

00:12:42: twenty-twenty six were presented this week at the Swiss Tech Convention Center At the EPFL in Lausanne And the evening of course clearly stood under sign of AI.

00:12:53: The big winner was EdwardTech An EPFL startup from the field of photonics.

00:12:59: The team won the grand prize of one hundred and fifty thousand francs.

00:13:03: Edward Tech develops integrated optical amplifiers on photonic chips, that sounds very technical at first but the use case is very relevant.

00:13:11: as AI continues to grow data centers need ever faster and more energy efficient data connections.

00:13:18: That's exactly where Edward Tech comes in.

00:13:21: Then there is also a spotlight award that went to Newman, a startup that builds on Apertus the open Swiss AI model.

00:13:29: Newman works on AI systems that can continue learning during use meaning they are not only trained once and remain static afterwards.

00:13:38: overall it is noticeable that four of the six category winners rely heavily on AI And among the winners were furthermore Rekcheck in The Compliance Space TrueLux for Product Authentication Botana AI for Agriculture, Vaxiva in the Vaccine Space, Actival in MedTech and Cinder with Therapeutic Wearables which won The Audience Award.

00:14:00: Guy my question to you is that for YOU now assigned that Swiss startups in the AI space are moving more strongly towards infrastructure and deep tech meaning away from pure AI chips toward photonics learning architectures or regulatory systems.

00:14:15: One can say that.

00:14:16: I mean, everyone has AI on them today.

00:14:18: That is already a good point Exactly!

00:14:20: That's what i actually also find interesting about these awards.

00:14:24: We are not only seeing startups here that simply put an AI layer On top of existing products.

00:14:30: With EdwardTech it is about physical infrastructure behind AI Meaning data transmission Energy efficiency And scaling up data centers.

00:14:39: Those are completely different layers from the classic software and SAS applications.

00:14:45: We know the Photonics, Photonic Integrated Chips field very well And of course certainly a very exciting area where such an award is also well placed.

00:14:55: Then Numon.

00:14:56: that is also exciting because they address The learning principle itself.

00:15:01: if A model can continue Learning during use That concerns not only the Software but Also questions around hardware, memory energy consumption and also deployment.

00:15:13: For Switzerland that actually fits very well.

00:15:16: the strength here traditionally does not necessarily lie in building the fastest consumer app.

00:15:21: rather we are effectively a deep-tech nation for research transfer precision technology an above all B to be applications.

00:15:29: The winners actually demonstrate that quite well and they also show the AI in Switzerland will probably scale more through infrastructure, industry health care compliance.

00:15:40: And also specialized platforms.

00:15:42: so not simply a chatbot or generative tool.

00:15:45: good let us get to the second piece of news.

00:15:47: Let's go to the USA namely open AI.

00:15:51: we have not had them in program for quiet awhile.

00:15:54: We looked at current figures which were leaked published financial times and on the information, which are always very well informed.

00:16:03: And one could see according to current figures that company burned around three point seven billion dollars in first quarter of twenty-twenty six Cash burn, one has to just imagine that with a revenue of five point seven billion dollars.

00:16:18: That means more than half the revenues were directly gone again.

00:16:22: at The same time open AI is sitting on over seventy billion dollars cash after the most recent financing round But also as gigantic commitments for computing capacity Reportedly up to six hundred and sixty-five billion dollars by twenty thirty guy.

00:16:38: Let us put that in context.

00:16:40: Is this burn rate at open AI a normal growth phenomenon or already more of a warning signal from an investor perspective?

00:16:48: Well, normal about such a burn rate is certainly not very much.

00:16:51: I mean one has to let the figures sink in for a moment.

00:16:54: Six hundred and sixty five billion in commitments that is simply really a bit out of this world.

00:16:58: One has to say.

00:16:59: OpenAI is in extreme investment phase And it also seems to be the case that whoever really wants to stay at the front with these frontier models has to invest massively in data centers, energy provision GPUs research and also talent.

00:17:15: In that sense The high burn rate is not surprising.

00:17:18: normal I would not call it either.

00:17:20: when this magnitude of three point seven billion That is crazy!

00:17:26: When a company burns so much just for months then It's no longer classic software growth model.

00:17:31: That is infrastructure, industry and research all at once.

00:17:35: And there's already the central question will this investment turn into a scalable profitable business that can make up for losses being written now or do costs remain structurally high?

00:17:49: What you think Max?

00:17:50: Mm-hmm, that is a good question.

00:17:52: OpenAI does at least report rising revenues and better gross margins.

00:17:57: The margin was reportedly around forty percent in the first quarter up from thirty three percent In the prior year.

00:18:04: That has already assigned that model gradually becoming more efficient.

00:18:07: That is admittedly a positive part of the story.

00:18:11: I mean, better margins are always good and that shows open.

00:18:15: AI per dollar revenue has somewhat lower direct model in operating costs than before.

00:18:21: That can be due to more efficient models, better utilization but of course also too pricing or economies of

00:18:27: scale.".

00:18:28: But thirty-nine percent gross margin if we just look at that simply is for a software company still relatively low especially when the same time research development sales and equity based compensation are rising massively being pushed forward.

00:18:43: I mean according to the information article in the quarter at around eight point six billion US dollars.

00:18:53: That shows that actual cost base, which lies not only operating models but permanent arms race for next generation and staying in fight of front.

00:19:04: so let us come to last piece news.

00:19:06: this is quite an extraordinary Swiss AI story.

00:19:10: a Basel based association called macroscopic ventures is apparently among the early investors in Anthropic, meaning the company behind Claude.

00:19:19: The NZZ researched this and also cited you, Max!

00:19:23: The exciting point?

00:19:24: Macroscopic ventures had already invested in Anthropiq in twenty-twenty one and twenty-two.

00:19:30: Today, Anthropaq faces a potentially gigantic IPO with an valuation close to one trillion dollars.

00:19:36: Max, you are quoted in the NZZ article with a rough contextualization of The Financing Rounds.

00:20:00: Exactly perhaps before I answer a quick zoom out.

00:20:03: Lorenz Honegger from the NZZ has really written very exciting article here, i also did not know that it was clear to me who had invested in first round.

00:20:14: they were mostly people who didn't invest with high conviction rather believed primarily two founders and said ok are incredibly good which is true.

00:20:27: One could assess that even back then, but one had no idea in twenty-twenty-one at this point the company would grow so large.

00:20:35: So it is already exciting!

00:20:37: Just very importantly here these days Anthropic is fighting in USA The American government making life difficult for them.

00:20:46: The IPO was actually announced, but now the new model had to be stopped quasi and that of course has also unsettled the investors.

00:20:55: So it may be that the IPO is postponed.

00:20:59: just a few seconds ago notification came over the Bloomberg ticker that Anthropoc is currently considering postponing this IPO.

00:21:07: So one should not just briefly mention that, so you do not think we are completely ignoring this news.

00:21:12: But back to the topic... You asked whether the multiples of hundred to two-hundred, whether those are normal?

00:21:19: No!

00:21:20: That is very extraordinary.

00:21:22: In VC a multiple of ten is already considered very, very good.

00:21:26: So if the fund returns three to five times at portfolio level that's already excellent.

00:21:31: so mathematically roughly four time depending on compound interest effect one it then adds around plus or minus ten percent to fifteen percent.

00:21:39: and of course its case.

00:21:41: some investments fail.

00:21:42: most funds make about thirty investment twenty-to-thirty investment eighty percent they write off leaving a few others remaining and those then have to carry the entire fund, which in principle means that one-to-two must be home runs meaning big cases.

00:22:00: Home runs are hundred X cases, meaning they really pour it in properly and such home runs are simply incredibly rare.

00:22:07: but a single homerun is enough and then the fund is of course easily paid back.

00:22:12: an anthropic is now exactly.

00:22:18: When you invest very early in a company that later becomes one of the most valuable private technology companies in the world, then such figures emerge.

00:22:28: One has to be careful there.

00:22:29: those are rough orders of magnitude because we never know exactly how much macroscopic ventures invested under what conditions?

00:22:37: How much they were diluted whether they still hold the full position.

00:22:41: The question is also whether the latter investors have any liquidation preferences anti-dilution protection all of that contractual side does not necessarily come through.

00:22:51: The cap table is not necessarily visible from that, and we do not know the cap table either.

00:22:56: so here certainly a major disclaimer.

00:22:58: nevertheless the direction is clear.

00:23:01: for the early investors Anthropic was an absolute home run probably one of the most spectacular AI investment cases of all time.

00:23:10: when you look at the case what makes it particularly special?

00:23:15: Is it the return itself or that?

00:23:18: here, It was not a classic Silicon Valley VC but non-profit association from Basel.

00:23:25: That invested early?

00:23:33: But yes, that is somehow somewhat expected with macroscopic ventures.

00:23:36: The story is different because the organization comes from the environment of effective so-called effective altruism and strongly engaged with AI risks.

00:23:46: That means the investment was presumably motivated not only financially but also strategically or one can say mission driven.

00:23:54: One wanted to support an AI company which places stronger emphasis on safety & alignment.

00:24:00: When a billion dollar return then emerges that, it of course changes the starting position.

00:24:05: Suddenly a relatively small organization from Basel potentially has enormous financial resources to fund research non-profits or projects in the AI safety space.

00:24:17: at the same time however attention also arises whoever warns about the risks of AI and simultaneously benefits financially strongly how mission, capital interest and governance fit together.

00:24:34: That will certainly be

00:24:35: interesting.".

00:24:37: I would say this story is more than just a success message for Switzerland.

00:24:41: it also shows how closely in the AI world capital safety thinking and societal influence are interconnected.

00:24:48: Anthropic is not only an IPO candidate but also a good example of who sits at the table And certainly, I would say one of the more sympathetic models which also give indications that AI is not always only positive but also carries certain risks with it.

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00:27:10: Let us come to the main topic, deep tech in Switzerland and do a report that contextualizes The second edition of the Swiss DeepTech Report, the two-thousand twenty six addition has just been published.

00:27:27: Deep Tech Nation Switzerland is one of the initiators, while startup ticker and deal room provide data analysis foundation.

00:27:48: In terms of content The report puts forward a strong thesis.

00:27:51: Switzerland isn't simply good research location but it's developing into globally most relevant deep tech ecosystems.

00:27:59: Particularly highlighted are the role of ETH and EPFL in founding spinouts growing importance AI robotics future compute as well as Switzerland's position in the European and global competition for deep tech talent, capital and industrial value creation.

00:28:18: A few figures show why The Report argues so self-confidently.

00:28:21: According to The Report, sixty three percent of total venture capital in Switzerland flows into Deep Tech –the highest share worldwide Per capita, Switzerland with around one thousand four hundred and seventy dollars of deep tech funding is at the top of Europe.

00:28:35: And among the global top three.

00:28:37: At the same time The report shows that Switzerland is strongly internationally financed especially With larger financing rounds.

00:28:44: a considerable portion Of capital comes from abroad.

00:28:46: with the technology fields to A clear shift is apparent.

00:28:50: AI ML now makes up Around one quarter of the deep-tech companies founded since twenty twenty two according To Robotics is growing strongly.

00:29:00: Switzerland has produced significantly more VC-financed robotics startups per capita than many stronger VC nations, and in the field of future of compute Switzerland benefits from its strength.

00:29:16: The big question is therefore how does this strong research and startup base become an ecosystem that not only produces technologies but builds global category winners, For the DeepTech Dive today, we have Andreas Punter with us.

00:29:32: He is Head of Marketing and Communication at DeepTech Nation Switzerland meaning that initiative has set itself a goal for positioning Switzerland as leading deep tech nation further developing framework conditions for startups scale-ups investors.

00:29:47: Welcome Andreas!

00:29:48: It's great to be your guest Guy in Max.

00:29:50: Let me get straight into questions.

00:29:52: The report puts forward very strong thesis.

00:29:55: Switzerland is a deeptech focused VC economy.

00:29:59: Sixty-three percent of VC capital flows into deep tech.

00:30:04: What does that mean concretely?

00:30:05: And why is this contextualization in this case also so

00:30:08: important?".

00:30:09: That's correct, Guy!

00:30:11: The report confirms no other country in the world invests such a large share of its risk capital in Deep Tech.

00:30:19: Switzerland at sixty three percent as you said before... ...is ahead China at fifty six percent and USA at fifty four percent.

00:30:28: From our perspective, this per capita measurement is of course very important since smaller countries compared to larger countries will always perform worse simply due to sheer scale.

00:30:38: That means The per capita measurement shows the focus, it shows the intensity.

00:30:43: And what it also demonstrates is that the ecosystem is participating in and leading global megatrends around AI, robotics, tech bio... That means companies who are already globally valuable today or tomorrow support them from a research location where global market leaders emerge?

00:31:03: That would be exactly we all wish for!

00:31:06: And the report works with very clear rankings and metrics, for example on the deep tech share of venture capital.

00:31:13: On spin outs investor origin and also individual technology fields.

00:31:19: how did you collect an also delineate?

00:31:21: The data?

00:31:21: what counts in the report as deep-tech?

00:31:24: What sources were used and where are the methodological limits off these comparisons?

00:31:29: uh...

00:31:30: The report is based on validated figures from the global platform deal room dot co which of course brings in the global perspective.

00:31:39: On the other hand, we also work together with startupdicker.ch to cover local perspectives.

00:31:46: Covered are startups from Switzerland meaning headquartered in Switzerland or a significant core operative team in Switzerland.

00:31:54: When we talk about deep tech, We probably have a relatively broad coverage but the strong science focus IP focused long development cycles high capital requirements before market entry and importantly of course especially also partially compared to other views with us in Deep Tech.

00:32:12: The entire field of life science biotech medtech is also integrated.

00:32:17: That means one of the central pillars of the Swiss ecosystem is subsumed under that deep-tech concept.

00:32:24: What of course has limits are the sharp data collection around early stage rounds, where there is also partial challenges for example overlapping segments.

00:32:33: That means an AI supported drug development tool flows into both biotech and AI.

00:32:39: but fundamentally this report gives a good view on current ecosystem

00:32:43: And we are indeed almost world champion, or at least on the podium in per capita deep tech funding.

00:32:48: Is that now primarily an expression of the high quality of startups?

00:32:52: Or simply also a sign that we focus on Deep Tech and is just particularly capital intensive?

00:32:58: In per capita deep-tech funding, Switzerland is at one thousand four hundred and seventy dollars.

00:33:04: That means as you said first place in Europe ahead of Sweden and also globally among the top three meaning alongside the USA and Israel genuinely strongly positioned globally from our perspective that it's a result very high density strong spinouts now entering growth phase moving into larger rounds.

00:33:23: When one now compares globally, I would say deep tech is everywhere in the world always capital intensive.

00:33:30: Whether it's Boston or Tel Aviv just as in Zurich.

00:33:34: that means we in Switzerland attract such large sums actually proves Swiss start-up ecosystem well positioned compared to global competition also operating efficiently and the fact that we see global mega funds, Sequoia general catalysts leading our rounds.

00:33:52: That is the proof that here there's real value, strong startups with global market potential being built.

00:34:00: And when we now look at EPFL and ETH they are second best universities in Europe.

00:34:05: They generate extremely many deep tech spinouts.

00:34:08: We read them everywhere.

00:34:09: What makes our university so strong?

00:34:11: Where does the bottleneck in this step from spin out to global scale up.

00:34:15: And

00:34:15: as you said, ETH and EPFL generate the most venture financed spinoffs Europe wide and are thereby even stronger than universities like Oxford Cambridge and so on which perform very well in many rankings.

00:34:29: that of course comes from the long, long tradition of top research from very well developed infrastructure and then also support programs such as for example Venture Kick Which Support The Journeys.

00:34:41: what we see is

00:34:42: Over recent times, something has changed.

00:34:45: Namely that young talents after completing their degree at the university do not automatically go somewhere into a large corporation or abroad but they stay here and invest time to build out technology.

00:34:56: Where the bottleneck is?

00:34:57: certainly when we look beyond pre-seed & seed.

00:35:00: there are world class but it comes larger growth rounds in report from fifteen million dollars onwards.

00:35:07: That's where domestic capital is lacking.

00:35:10: The dependency on foreign lead investors there is very, very high.

00:35:15: What we on the side of deep tech nation are doing especially towards scale-ups Is Project Switzerland?

00:35:21: That means that it's from our side about strongly supporting scale ups in this phase In our program with help of role models who have already done before.

00:35:30: We know project Switzerland well Of course Mishi Sauter one your colleagues Already presented here on burn rate.

00:35:38: I do not remember exactly which episode that was, but for all those who are interested you can search for it on Spotify or wherever.

00:35:45: You listen to the podcast and you will definitely find it.

00:35:49: And yes, you have now mentioned that we are strongly dependent on international capital in The Growth Phase.

00:35:55: Is That Now More of a Quality Seal For The Location?

00:35:58: That is great!

00:36:00: Or is It Also A Genuine Warning Signal For Us?

00:36:08: Eighty-two percent of the capital comes from abroad, primarily from the USA.

00:36:13: That could be interpreted as a warning signal.

00:36:16: From our perspective it is actually also a quality seal.

00:36:20: It means that technology and startups are globally fully competitive because best funds in this world are validating our location.

00:36:30: The warning signal – that's problem.

00:36:32: we're there by exporting future value creation.

00:36:36: That means if the large gains from tech giants that we build, then accrue more to American and Asian funds or global funds.

00:36:44: Then of course for Switzerland and institutional investors in Switzerland an absolutely missed return opportunity.

00:36:51: And when you read this report closely You hear once a statement by our co-author Manja Humanez From Kiekfund which states We have achieved great accomplishment namely that we have built an ecosystem in the later stage space where we operate without government risk capital, and that is primarily fed from private domestic capital pools.

00:37:13: That means it's a challenge that lies ahead of

00:37:16: us.".

00:37:17: Let Us Go To Robotics!

00:37:18: It Is One Of The Most Striking Findings Of The Report.

00:37:21: Switzerland produces significantly more VC-financed robotics startups per capita than many larger countries.

00:37:28: What Makes Robotics?

00:37:30: A Swiss Sweet Spot?

00:37:31: Is it research, industry talent or is it also the proximity to concrete applications?

00:37:37: I would say that robotics in Switzerland and this especially so in Zurich and at EPFL has developed extremely strongly.

00:37:44: That means one also speaks of a worldwide robotics capital... ...and they are considerably stronger.

00:37:50: And again seen per capita than for example in The United Kingdom….

00:37:54: …or even USA.

00:37:56: We see success on several levels!

00:37:58: On the one hand of course, the interplay of decades of research precision research in the watch industry.

00:38:05: The long tradition there but simultaneously also top level research In the area of AI physical AI.

00:38:11: That means One brings together fields There that are extremely important in robotics.

00:38:16: and what from our perspective is Also an important part Of the success Is that at ETH we have researchers like Roland Sigwart Like Marco Rutter who do not only focus on writing papers, but who really build physical systems that go out to construction sites into factories and implement topics hands-on.

00:38:36: And of course also institutions like a robotics club the Swiss Robotics Day have shaped and continue to shape the ecosystem.

00:38:44: That is of course exciting The capital of Switzerland for robotics worldwide.

00:38:49: If we now zoom out a little further We have many topics where we are extremely strong biotech AI robotics as just mentioned, tech bio future of compute all which are currently gaining weight.

00:39:03: Does the danger also exist there that resources capital and attention fragment too strongly?

00:39:08: or is it generally only positive?

00:39:10: From our perspective this not a fragmentation but rather healthy and necessary expansion strong Swiss foundation.

00:39:19: Biotech remains by value still largest pillar but new segments are being added and new themes such as AI, robotics.

00:39:26: And if you specifically look into AI now since twenty-twenty two already one in four new company formations comes from that field.

00:39:34: That means a diversification is taking place.

00:39:37: What is additionally exciting?

00:39:38: Is of course the fact that at the boundaries of disciplines interesting research fields also emerge.

00:39:44: A nice example is the topic of tech bio where on the one hand, the topic of AI meets the traditional strength in life sciences and their interesting opportunities for startups emerge.

00:39:56: And what from our perspective also speaks for it is that the technology mix meaning the broadening of topics then also attracts new ecosystems, new industries, new tech labs or global tech labs from the world and thereby makes the entire ecosystem Also more crisis resistant.

00:40:15: very good We received the report a little bit in advance, many thanks for that.

00:40:20: We of course read it in detail and looked at it very well prepared aswell.

00:40:25: And if you now very positively and optimistically formulated If You Now had to name one point where Switzerland despite all its strengths is not yet were should be Where Is The Great Swiss Weakness?

00:40:44: What we find, yes a difficult situation is the fact that today there is excellent education much investment in early phase from tax money on other hand also seed funds.

00:40:57: That's very well supported but then where start-ups take off and are on their way to becoming global players.

00:41:04: capital typically comes from abroad which means for us That is a certain risk that we would like to mitigate and therefore also work very hard at DeepTechNation, so institutional investors such as Swiss pension funds can invest in Swiss deeptech.

00:41:25: For example continuing education programmes around venture capital for pension funds.

00:41:31: We are doing a transparency study together with the University of Basel and also working on a fund, together with an investment foundation to facilitate investment in deep tech.

00:41:41: Very exciting!

00:41:42: You have already somewhat anticipated the closing question there but it is something that perhaps cannot be implemented within a year's time –the three points you mentioned there– if we now look at the next edition of The Report which metric would need which would certainly stay the same so that we can say Switzerland has really moved forward as a deep-tech nation.

00:42:05: One important metric is without question, The absolute growth of VC investment.

00:42:11: That's a central indicator.

00:42:13: Last year in twenty twenty five We achieved the record level Two point six billion invested In DeepTech And our goal Of course not only to maintain it But further expand The share of domestic late-stage capital is also important.

00:42:29: And if one wants to look a little further still, then exits are off course also important which bring capital and talent back into the ecosystem?

00:42:37: Absolutely!

00:42:38: This flywheel of VC it has to run so that local investors also invest more in venture capital because they see hey the capital does come back indeed multiplied... ...and I can write larger tickets perhaps go into growth phase.

00:42:55: let us say In any case it remains exciting.

00:42:58: Andreas, many heartfelt thanks to you for your insights on the report.

00:43:02: It was extremely entertaining and exciting And thank you for sharing those so openly with us here at Burnrate.

00:43:09: Many Thanks Guy & Max!

00:43:10: Of course The Report can be downloaded anytime at deeptechnation.ch.

00:43:16: We will gladly link that in the show notes.

00:43:18: Then we wish a very nice evening.

00:43:20: So let's come to the transactions of last week.

00:43:23: Again, some transactions have been communicated and we've put together the most exciting ones.

00:43:28: briefly for you here.

00:43:48: I

00:43:50: would say that is a well-written company developing the technology for the recycling of pet and polyester based on so called microwave assisted depolymerization or made for short.

00:44:01: While mechanical recycling can only process a portion of pet waste, Grenne's also supposed to be able to recycle difficult waste streams such as colored bottles textile fibers and films.

00:44:13: The goal is to produce food grade monomers again that can be fed back into pet processing without any loss of quality.

00:44:20: The target customers are primarily actors from the packaging, textile and plastics industry who need access to high-quality circular pet.

00:44:29: The technology is particularly relevant for companies that want to increase their recycling rates.

00:44:37: With the first facility, the startup therefore addresses not only classic PET bottles but also polyester and mixed PET waste streams.

00:44:48: And what I find exciting here is the transition from technology development to industrial scaling.

00:44:54: The planned facility in Spain is supposed reach a capacity of forty thousand tons of virgin pet chips per year from recycled monomers.

00:45:02: Additionally, the project meaning alongside The Financing Round has already been selected for € Thirty-five million from EU Innovation Fund.

00:45:10: That shows that GEN can not only raise venture capital but also attract larger European industrial and climate financing.

00:45:17: The fresh capital flows primarily into construction of first industrial facility in Spain.

00:45:24: As mentioned before, the company wants to thereby bring its patented MADE technology to market at large scale for the first time.

00:45:33: If model works, company could make an important contribution returning pet and polyester waste much more broadly into genuine circular

00:45:43: loops.".

00:45:44: With the second transaction we go to Geneva and Shenzhen.

00:45:48: Zan, or however one pronounces that exactly is a legal tech company and has now raised five million US dollars from Tencent Investment.

00:45:56: The company builds a contract intelligence platform for law firms and legal teams.

00:46:01: the round is particularly exciting because here A large Chinese investor is investing in an internationally oriented Legal AI Platform.

00:46:09: Xan develops AI software that is supposed to analyze contracts the way an experienced associate would.

00:46:15: The platform consists of three modules, review checks contract drafts against proprietary playbooks and proposes red lines.

00:46:22: Draft creates boilerplate text in style-of-the law firm and recall answers questions across previous mandates or contract portfolios.

00:46:30: Important here every marking should be traceable with a comprehensible reasoning & source reference back.

00:46:38: Customers are of course law firms, in-house legal teams and legal aid organizations.

00:46:44: According to the company more than three hundred forty law firms and legal teams have already reviewed over two and a half million contracts with ZAN.

00:46:52: particularly relevant is use M&A accounts where platform is supposed reduce median first pass review time by sixty two percent making significantly more relevant clauses visible for partner review.

00:47:03: let us come last transaction off week.

00:47:06: Skate is a Swiss PropTech startup and has now closed an oversubscribed pre-seed round in the high six figure range.

00:47:14: Skate develops an AI platform for construction companies that can analyze complex tenders more quickly.

00:47:20: The software helps with reviewing tender documents, identifying contractual risks and creating bid documents.

00:47:26: Today this process is often still manual time-consuming and error prone.

00:47:31: And exactly their skate wants to improve speed and quality.

00:47:34: the target customers are construction companies that regularly participate in complex tenders.

00:47:41: The startup has already developed the first version together with a group of innovative construction companies.

00:47:47: Additionally, there is a partnership with the Swiss Contractors Association through which the start-up theoretically gains access to around two thousand four hundred member companies.

00:47:57: what I still find exciting they're as the combination for very concrete industry problem and strategic industry access.

00:48:04: Tenders in construction are enormously complex, legally relevant and often ultimately decisive for the margin of a project whether written positively or negatively.

00:48:15: And if Skate makes risks visible earlier and automates the bid creation then that can create direct economic value for construction companies.

00:48:24: The capital is intended to bring Skype from first customer setup into full market deployment.

00:48:30: The focus initially lies on Switzerland, where the team sees great potential.

00:48:36: After that, the expansion into the DAK region is supposed to follow for which first contacts already exist.

00:48:43: Strategically, the aim is therefore to scale an AI solution for tenders in a very traditional but data and document intensive market.

00:48:52: so Episode one hundred, the VC Insider podcast.

00:48:57: If you want to support our podcast subscribe to our newsletter and share it in your network.

00:49:03: many thanks for listening in.

00:49:04: we wish you a lovely weekend.

00:49:06: take care and goodbye.