E102 [AI-Translated] Swiss Champion Fund | Swisscom | Repeat Founders | VC-Math | PimPay | Prem AI | Memo | Talentir

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 Jafredi.

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

00:00:16: I'm here talking with Guy Gifredi about the startup scene with a focus on venture capital.

00:00:21: episode one hundred two is coming up and we're recording on Thursday July second at nine p.m.. This is our last episode before the summer break.

00:00:29: We are heading off into well-deserved summer holidays And will be back with you in August.

00:00:34: this podcast is sponsored by our partners umniumandupscaler.ch.

00:00:40: guy.

00:00:40: what Are today's topics?

00:00:42: Yes, today in the news we're talking about The New Swiss Champion Fund.

00:00:45: A Swiss hundred million growth fund.

00:00:48: then were looking at the closure of Swisscom's Silicon Valley office after twenty-eight years.

00:00:52: and In the focus topic, we'll then go into your Bilans column that's just being published and the question of whether The Old Venture Capital Math still adds up.

00:01:11: Then we have Andre Renfer from Pimpay as a guest And were talking about weather.

00:01:16: payments in Switzerland Have become an invisible tax.

00:01:21: To wrap-up We had three exciting deals announced last week on this programme.

00:01:25: Switzerland is playing tonight against Albania.

00:01:28: No Algeria, Algeria exactly!

00:01:30: Yes I'm quite the football expert.

00:01:33: so what's your prediction?

00:01:34: who's going to win?

00:01:35: Well i'm hoping that our Swiss stars will score a few goals.

00:01:39: they've actually been performing quite well so far in the tournament.

00:01:42: So I'd say Switzerland three Algeria one and you...I

00:01:45: say two-to-one for Switzerland And Shakiri scores the decisive goal.

00:01:49: No, seriously.

00:01:50: I say two to one for Switzerland and it'll be exciting because by the time this airs we will know who was right.

00:01:56: too bad.

00:01:56: We're both backing Switzerland.

00:01:58: well It almost has to Be that way.

00:02:00: you Say three-one i say Two One maybe?

00:02:02: We can also tip Who scores The winning goal For switzerland.

00:02:06: what do You think?

00:02:06: who Scores?

00:02:07: It would be great if Manzambi keeps scoring a few more goals for Switzerland.

00:02:11: That'd make me very happy with the young man!

00:02:13: I'm tipping Vargas, scores the two-one for Switzerland and sends the squad of Moury into the round of sixteen – we'll know when it airs….

00:02:21: Well...for me..it could either be the two one or three ones since both are winning goals?

00:02:26: That's true.

00:02:27: Let's get to the news.

00:02:28: Last week, The Swiss Champion Fund was announced – a new venture capital fund yet another primarily in Series A and Series B rounds.

00:02:46: Behind the fund stand two well-known figures, Christian Winkler co-founder of The ASC Impact Fund formerly a partner at DII Venture, Inno Suisse Coach & SECA Impact Lead as well as Michael Wieser entrepreneur and VC who was involved among other things in building up the Helvetia Venture

00:03:06: Fund.".

00:03:07: The core of the news is actually a well known problem.

00:03:11: Switzerland has many strong startups university talents, and technologies.

00:03:16: But when companies want to scale they often have to look for capital abroad.

00:03:21: That's exactly where the Swiss Champion Fund wants to step in.

00:03:25: The fund wants to finance four-to six promising growth companies per year exclusively from the venture leader's deal flow.

00:03:32: Typical first investments of three to five million Swiss francs each are planned, as lead or co-lead investor in series A and B. The first closing is planned for Q four twenty twenty six which coming up soon First investments set to start in twenty twenty seven.

00:03:48: Guy does a hundred million fund actually solve Switzerland's scaleup problem?

00:03:53: Or it more an important signal than real structural solution?

00:03:57: Well A structural solution isn't anywhere near done with a hundred million, but it's definitely an important signal and A hundred million isn't irrelevant for Switzerland, especially when it comes to Series A and Series B. That's exactly where international capital is being invested today And accordingly It can be exciting to set up a Swiss fund.

00:04:17: here I mean in seed Capital.

00:04:19: we have comparatively many swiss funds investing But as soon startups want to scale internationally the rounds get bigger?

00:04:25: Yes Then as i said foreign funds come into play more.

00:04:28: you also Have to be honest For an entire ecosystem.

00:04:31: a hundred million Isn't huge But if the fund supports four to six companies per year and writes tickets of three to five million, it can help very selectively but won't dramatically change the capital market.

00:04:43: The real leverage lies in whether this fund can mobilize more private and institutional capital into Swiss growth rounds.

00:04:50: that's something we frequently discuss on burn rate.

00:04:54: That would, of course be a great thing.

00:04:56: And if the Swiss Champions Fund as lead or co-lead investor creates trust and thereby keeps companies in Switzerland longer then the impact is much bigger than the fund volume actually being communicated here which they still need to reach.

00:05:09: I'm curious what they'll communicate at first closing.

00:05:13: how many have already assembled?

00:05:16: for me that's what will be decisive.

00:05:19: Will this just be an isolated fund or a catalyst that makes Swiss scale-ups financeable in Switzerland for longer?

00:05:26: Good, on to the second piece of news and we're staying in Switzerland.

00:05:30: Swisscom has closed its satellite office in Silicon Valley after twenty eight years – That's it!

00:05:36: According Marco Walski from Bilance The Office was already dissolved at end May.

00:05:41: Swisscom had been present in Silicon Valley since nineteen ninety-eight, first in Menlo Park then later Palo Alto.

00:05:48: The purpose of this outpost was actually classic for large corporates technology and trend scouting identifying potential acquisitions and bringing a bit of silicon valley mentality back into the organization.

00:06:01: Swisscom justifies the step by saying that innovation today is globally and de-centrally accessible, a fixed physical location no longer necessarily required.

00:06:12: That's exactly what makes this decision interesting in my view of all times.

00:06:16: to do so when AI, Defence, Tech, Space, Robotics and Infrastructure topics are once again strongly concentrated in Silicon Valley One of the most important Swiss tech companies is withdrawing physically.

00:06:31: Guy, in your view this a modern understandable step?

00:06:36: Because innovation today is actually globally and remotely accessible or does Swisscom thereby lose important access to one?

00:06:48: Well, strategically the step is perhaps a bit risky but I think both things can be partly true at the same time.

00:06:54: I mean of course innovation today is much more accessible than before.

00:06:58: you can learn and see a great deal through databases networks funds newsletters conferences and remote calls without having to have an finance office in Palo Alto.

00:07:09: corporate doesn't necessarily need physical address permanent physical presence just to understand which startups are emerging right now and what trends there are in Silicon Valley.

00:07:20: But you do have to see that Silicon Valley doesn't function purely through information, it functions through proximity speed and many informal networks.

00:07:31: Sandhill Road for example where all the investors regularly meet an exchange ideas.

00:07:40: Many relevant conversations don't happen in official pitches, but at dinners meetups investor intros and through personal relationships.

00:07:49: And especially when it comes to AI a new infrastructure physical presence is often an advantage because you simply feel earlier which topics really have momentum and which are just a bit of buzz.

00:08:03: for Swisscom the decisive question Is the office just being closed or is access to the ecosystem being replaced in another, perhaps even more efficient way?

00:08:12: If it's a cost cut then its loss.

00:08:15: if Swisscom instead works through funds partnerships targeted scout networks and regular executive presence Then It can still function.

00:08:23: Wonderful!

00:08:24: Let us go into the third piece of news And we are looking at an exciting development In European Venture Market.

00:08:30: Pitchbook reports that experienced founders are currently receiving significantly more capital than first-time founders.

00:08:36: Concretely, European founders who have already founded at least one company... ...are raising a median of €四 point three million this year First time founders come in at a median two point five million euros.

00:08:49: That's seventy to percent more capital for repeat founders.

00:08:53: In the AI area The difference is even bigger.

00:08:56: Their experienced founders raise a median of ninety two percent.

00:09:00: more interesting however is that valuations don't necessarily rise more aggressively pitchbook writes.

00:09:06: the median step ups are the same for both groups namely one point five x. investors are therefore giving experience founders above all.

00:09:14: larger checks not necessary significantly better valuation dynamics.

00:09:19: The big question is, Is this simply rational risk management in a more difficult market or does it thereby create a structural disadvantage for new founders?

00:09:28: Guy.

00:09:28: Is this trend In your view healthy For the startup market Or Does It lead to capital flowing too strongly Into familiar founder profiles?

00:09:37: Well short term This trend is absolutely understandable.

00:09:40: Long-term it can of course also become dangerous.

00:09:42: Um...In A Difficult Funding Market Investors often look for signals Of safety And a repeat founder, at least one who has already had a positive exit naturally brings exactly that experience in fundraising and existing network.

00:09:55: A better understanding of hiring team building go to market scaling and also the exit process.

00:10:02: from an investor's perspective That significantly reduces the feeling of risk.

00:10:07: but venture capital doesn't just live From risk reduction.

00:10:10: it lives from finding big outliers.

00:10:13: And many of these outliers simply don't come from the obvious founder pool.

00:10:18: First-time founders often have a fresh perspective, are sometimes also closer to user needs and the latest tips.

00:10:25: How do you build a team today?

00:10:27: how Do You scale Today with all The AI?

00:10:29: And they think less about existing playbooks and leveraging how someone built a company five or ten years ago.

00:10:36: So I'd say it's healthy when experience is rewarded, but it becomes problematic when experience become the substitute for genuine founder judgment.

00:10:43: A repeat founder isn't automatically better founder They're just simply easier to finance.

00:10:49: Yes.

00:10:49: so what does first time founder need show today To still hold their own against an experienced founder in fundraising?

00:10:57: Well A first-time founder's disadvantage is a missing track record, and that signal they have to replace it with other very strong signals.

00:11:06: The most important thing also in my view is found their market fit.

00:11:09: so why exactly this team particularly well positioned to solve the problem?

00:11:14: It can be industry knowledge technical depth access to customers an insight others don't have.

00:11:20: And second earlier proof needed today.

00:11:23: Not necessarily millions of revenue but clear indicators customer conversations, paying users fast product iterations strong customer retention or a very concrete problem that's truly painful for the market.

00:11:37: And third first time founders also need to show that they learn quickly.

00:11:41: investors know that mistakes even many mistakes happen on the path of success and The question is does the team recognize these mistakes?

00:11:49: Quickly enough and does it also adapt?

00:11:52: and I think It's very important.

00:11:53: perhaps as a fourth point Does the founder have that obsession?

00:11:57: Hey, I really want to be successful on this topic and has basically written that on the ceiling.

00:12:02: And looks at it every night.

00:12:03: hey i'm going To Be Successful With This Startup Because Of This And That Reason!

00:12:08: And so this founder obsession...I find that equally important On The Topic.

00:12:13: My take is, first-time founders shouldn't simply try to seem like repeat founders.

00:12:18: They don't have the experience yet they should show why their lack of experience Is more than compensated for by speed closeness To the customer and a unique view Of The Market.

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00:13:41: Let's get to the focus topic Max, alongside Burnrate you also write a Bilanz Meistermacher column and it has just been published.

00:13:51: What was the topic of the latest bilans column?

00:13:54: Yes!

00:13:54: The article is about whether the old venture capital math still adds up.

00:14:03: A fund makes many bets.

00:14:05: Most investments deliver little or fall away entirely.

00:14:09: Some develop solidly, so maybe one to three times return and two big winners pay back the entire fund at the end.

00:14:17: This model worked very well in boom years or at least looked good.

00:14:21: there was a lot of capital rising valuations follow-on rounds And hope for big exits.

00:14:28: Now reality looks different.

00:14:29: we have almost no exit.

00:14:31: IPOs are difficult as were also seeing.

00:14:34: right now M&A is restrained and many LPs, that is limited partners the investors in funds are seeing too few real distributions.

00:14:45: That's exactly where this problem begins because venture capital doesn't live only from nice book values.

00:14:52: In the end money has to come back!

00:14:54: Thats why one metric is coming much more into focus DPI that is distributed to paid-in capital.

00:15:01: This measures how much capital has actually flowed back to investors relative the money invested.

00:15:07: In other words, not what's written on paper in terms of values and valuations but what was actually distributed?

00:15:14: And point my column is when many funds after seven or eight years show good valuation but have paid back little money then next fundraising becomes more difficult.

00:15:25: LPs become critical.

00:15:27: they ask Why should we tie up capital again for ten years or longer when risk, illiquidity and return aren't congruent?

00:15:34: That is don't match-up.

00:15:36: And in my view that's not a small cyclical dip to be honest but a structural warning signal.

00:15:42: venture capital certainly isn't dead But the model is getting harder more selective and very much more operational.

00:15:49: Yes!

00:15:50: Is this VC math really broken now?

00:15:52: Well, broken is maybe a bit pointed but the calculations have definitely become more uncomfortable.

00:15:57: We feel that too at Coyo in fundraising.

00:15:59: when an investor puts money into a VC fund They're tying up that capital for a very long time, often ten or twelve years.

00:16:07: The money is therefore illiquid.

00:16:09: there are high default risks and the investor can't simply sell tomorrow.

00:16:13: if they change their mind and want to exit in exchange For That There Must Actually Be A Very High Return.

00:16:19: So An LP Doesn'T Compare VC In A Vacuum.

00:16:23: They Could Also Invest In Government Bonds Equities Private Equity ETFs Or Other Asset Classes Like Debt Or Infrastructure.

00:16:31: Venture capital therefore has to not only look good in absolute terms but be better relative risk than other asset classes.

00:16:39: And yes, In the article I cite a calculation by investor Nikolai Rasmussen.

00:16:44: he says If you add up risk-free interest, an equity market risk premium a VC risk premium which is often forgotten and so called illiquidity premium.

00:16:56: VC should actually deliver returns of around twenty to twenty three percent per year for the risk to truly be worth it.

00:17:03: Yes but many funds don't manage that they may look good on paper.

00:17:08: A fund with multiple two point five or three times can appear attractive.

00:17:12: But if distributions come very late that is, don't flow immediately but only at the end of the funds term.

00:17:18: The annual return so the net IRR is significantly less impressive and thats exactly where this problem lies!

00:17:26: The industry has long relied heavily on valuations and theoretical multiples But LPs can't service their own obligations with paper valuations.

00:17:35: They need distributions And Thats why the important phrase DPI IS THE NEW IRR.

00:17:42: Not because IRR Is unimportant But because real distributions have become more important again than valuation markups.

00:17:50: Yes, that sounds like a fairly major shift That's currently taking place at the LP level or in thinking of LPs.

00:17:56: What does that concretely mean for fund managers?

00:17:59: For fund managers it primarily means The era of pure capital deployment is getting harder.

00:18:05: In the boom years, a fund could invest in many startups take small stakes participate in good rounds and hope that the market would keep pushing valuations upward.

00:18:17: Now when liquidity was available everywhere as we saw in twenty-twenty and twenty nineteen this model works for surprisingly long time.

00:18:26: but in a market with few exits And fewer follow on financings This passivity becomes a weakness.

00:18:34: It's simply no longer enough to just be on the cap table and wait for next lead investor or valuation premium.

00:18:43: Funds must therefore demonstrate more clearly what real added value they bring, can help companies operationally?

00:18:50: Can open doors to customers for example?

00:18:53: Can support with hiring?

00:18:54: Can also improve governance of company?

00:18:58: or can they provide strategic leadership in difficult phases and so on, etc.

00:19:03: And would also need to argue a differentiated way for their LPs?

00:19:07: Before you could perhaps say look at the valuations.

00:19:10: The portfolio is developing fantastically Today.

00:19:13: LPs ask yes but what has actually been realized, what has been distributed?

00:19:18: What exits are there?

00:19:20: and so on.

00:19:21: That's already a different perspective And I believe it is changing the whole industry.

00:19:26: The best funds will keep raising capital.

00:19:28: that's undisputed.

00:19:29: So large platform funds with strong brand On other side small specialized managers With clear niche can still be attractive But broad middle will come under pressure.

00:19:40: Yes, you write quite provocatively in the article that the middle of the VC market will be thinned out.

00:19:46: What exactly do mean by that?

00:19:48: Well I think the market is splitting very strongly.

00:19:51: at the very top there are large platform funds.

00:19:54: they have as i said a great brand they attract great people They have access to an international network and such funds get capital even in difficult markets because LPs trust them find good deals through cycles and a company companies.

00:20:10: So I'm talking here about the very big investors, VCs like Sequoia and Andreessen Horowitz or Baldurton in the UK In Germany for example Cherry Ventures those plus of course many more.

00:20:22: so The Champions League will continue to find good deals and LPs will invest there.

00:20:29: And then on the other side there are small funds which can also be convincing if they serve a clear niche for example specific technology and industry geographic market.

00:20:39: or it's for example that GPS have very good personal track record.

00:20:43: That is why you keep seeing single GP funds where one person leaves large fund says I'll just do it myself.

00:20:53: And then

00:21:13: the space in specific deep tech or specific defense tech gets taken from them.

00:21:22: The classic mid-sized fund that invests broadly holds many minority positions and waits for a big outlier, That fund has to prove itself again with DPI not simply book gains Because LPs today ask much harder questions also have greater selection.

00:21:40: Why should I invest exactly this fund?

00:21:43: What is its repeatable strength and where is the access it has that others don't?

00:21:47: And what does the operational value add for start-ups.

00:21:50: Above all, Where's the DPI?

00:21:52: so were?

00:21:52: are there distributions?

00:21:54: if those answers missing then simply becomes difficult to raise a successor fund.

00:21:59: Then these so called zombie funds emerge.

00:22:01: you know we've touched on this before.

00:22:03: These funds still exist until end of the funds term until they're liquidated.

00:22:08: The brand still exists portfolio managed but no new investments or almost No New Investments anymore.

00:22:14: Maybe it manages to do an SPV occasionally or something like that.

00:22:17: And the probability of a next fund is very, very low to almost zero and often happens quietly even for formally loud names.

00:22:27: nobody writes a press release with headline hey we didn't manage raise new funds.

00:22:32: now will just do fewer.

00:22:33: no more deals no more follow-ons have no partners.

00:22:37: at some point the fund is caretaker old hope.

00:22:43: What is the consequence for the VC industry overall with this?

00:22:47: well, phenomenon or this consolidation.

00:22:49: Well you're right to call it a consolidation.

00:22:51: I mean i believe its positive but maybe a bit uncomfortable.

00:22:55: It means less capital for mediocre funds ,it certainly means harder questions from LPs more pressure on valuations and also significantly stronger consolidation in the industry.

00:23:07: many funds will disappear others will merge still others only manage their old portfolios.

00:23:13: But long term that's healthy because Very much capital was very quickly distributed and not every fund had a right to exist.

00:23:22: Not every valuation was realistic, not every startup should have received so much money.

00:23:26: And now that discipline is returning So funds must show that they don't just look good in good times but can also realize values in difficult markets.

00:23:36: They need to invest more concentrated take more ownership co-shape things more strongly and think about liquidity earlier.

00:23:44: Yes, and LPs will select more carefully.

00:23:47: That's already happening now.

00:23:48: They won't just invest in the story Won't look at brands or paper performance But more strongly at real track records And proven ability to realize value.

00:23:59: For me The central thesis is therefore The classic VC model isn't dead but it getting more selective probably long overdue.

00:24:15: Our partner, Umnium brings investors together with up-and-coming Swiss startups through its platform and one of these start ups is Pimpei.

00:24:24: Pimpei wants to rethink Swiss payments with a local payment solution zero transaction fees for merchants an model that's meant not only make payments cheaper but also integrate.

00:24:35: loyalty offers customer retention Especially in a market where cards, wallets and twint have long been part of everyday life.

00:24:44: That's an ambitious statement I'd say.

00:24:47: Pimpay doesn't just want to be another payment tool but create alternative for the existing fee logic with goal leaving added value with local merchants and consumers.

00:24:57: For that we welcome today Andre Renfair co-founder of Pimpaye.

00:25:02: Andre brings long-standing experience from banking operations, compliance and entrepreneurship.

00:25:08: And at Pimpay is responsible for among other things operational setup and regulatory implementation.

00:25:15: Andre great to have you with us today!

00:25:17: Thank You very much for the invitation.

00:25:20: Yes, let's get straight into the questions.

00:25:21: Andre Pimpay says payments in Switzerland have become an invisible tax.

00:25:26: What do you mean by that?

00:25:27: And where does this tax hurt merchants the most?

00:25:31: and why has this problem been questioned so little until now?

00:25:34: Imagine your a baker.

00:25:36: You sell croissants bread coffee every day.

00:25:40: Your margin is tight.

00:25:41: That's normal in retail.

00:25:44: Then you accept card payment and lose one to two-and-a half percent of it depending on the payment method and provider.

00:25:50: to banks, acquirers schemes.

00:25:53: And technical service providers that sounds like little at first but with thin margins That can amount to a substantial portion of profit silently invisibly every day Every month?

00:26:17: The local shop, large merchants negotiate special terms.

00:26:22: Small merchants pay the system price.

00:26:24: until now hardly anyone has questioned this because practically all providers are built on this fee model.

00:26:32: Pimpay breaks exactly this model just like the flat rate subscription in the telecom industry did about ten to fifteen years ago replacing volume and time based billing.

00:26:42: Yes!

00:26:43: And you're committed to zero transaction fees for merchants and instead a subscription model, as you said.

00:26:50: How can this model work economically where classic providers earn very well per transaction?

00:26:54: This

00:26:55: is clearly about greatest advantages.

00:26:58: our model is deliberately designed for scaling.

00:27:01: full profitability comes with the growing merchant base over the next few years.

00:27:06: what's important for us are three points.

00:27:09: first The necessary minimum size is reached.

00:27:13: we're not talking.

00:27:17: Less than twenty-five percent of our addressable market is sufficient, while TWINT in the current market has already achieved a very high penetration of over eighty percent.

00:27:28: Second – Our operating model is extremely lean.

00:27:31: The cost per transaction is significantly below the classic card model because we avoid central cost drivers such as scheme fees, per transaction infrastructure and so on.

00:27:42: Third… We have additional revenue sources besides monthly subscription local marketing campaigns, loyalty functions and a share of voluntary roundups.

00:27:51: That's why a model with zero transaction fees for merchants can work economically?

00:27:56: Yes you want to partially bypass acquirers' issuers schemes and processes.

00:28:00: what is the technological and also regulatory challenge in that?

00:28:04: The key point is Pimpay isn't classic card system.

00:28:07: we are building closed payment systems with pre-funded wallet.

00:28:11: consumer loads money on that money sits in an omnibus account at CS Bank Riviera.

00:28:17: From there, we pay out the merchants daily.

00:28:19: this eliminates central cost drivers of classic card model no Classic Acquirers No Scheme Fees No Classic Card Infrastructure Per Transaction.

00:28:28: And as soon as open banking and instant payments like in Europe become fully available We'll connect our system to that and become even more convenient without additional costs Regulatory.

00:28:40: what's important is We're not a bank model.

00:28:43: The Partner Bank has the banking license.

00:28:46: Pimpay itself is connected to a zero and independently fulfills the relevant anti-money laundering requirements for the model.

00:28:54: At the same time, we are deliberately not building this setup To be bank dependent.

00:28:59: Additional banking partners Are already part of discussions For expansion from very beginning And also coordinated with our partner bank.

00:29:08: Technologically, biggest challenge isn't transaction.

00:29:12: We can handle that efficiently today.

00:29:14: The challenge is acceptance at the point of sale,

00:29:17: i.e.,

00:29:18: at the checkout itself.

00:29:20: That's why we're starting with the QR code because it works, is understood internationally and requires no new hardware from the merchant.

00:29:29: Tap to pay is an additional accelerator for us.

00:29:32: On the topic of NFC were therefore watching WECO development very closely.

00:29:38: As soon as the market opens up, we can react faster than the classic providers.

00:29:42: Yes many Swiss people use TWINT today almost reflexively.

00:29:46: now why should a consumer change their payment habits and additionally use Pimpay?

00:29:52: We're not fighting TWINT head-on.

00:29:54: I also think that would be completely wrong.

00:29:56: TWINT is strong TWINT established.

00:29:58: TWINT has an enormous user base in Switzerland.

00:30:01: but TWINT have structural problem.

00:30:03: The model isn't optimized for small merchants.

00:30:06: Peer-to-peer payments between private individuals are free.

00:30:09: Large merchants have strong negotiating power and pay significantly different terms than SMEs, the very biggest ones even free of charge.

00:30:18: The price pressure therefore lies mainly with small and medium sized merchant who finances the party and indirectly the big players as well.

00:30:26: That's exactly where we come in For the consumer.

00:30:28: We don't frame it a switching question.

00:30:34: Here's what you get back when you pay locally with PIMPAY.

00:30:37: With PIMPAI, You Get Rewards at your favorite merchant!

00:30:40: You support direct local trade... ...you become part of a local ecosystem and the merchant saves fees that today disappear from their margin.

00:30:48: That is different emotional & economic logic.

00:30:51: TWINT is payment, PIMPEI is Payment plus Local Benefit

00:30:54: Exciting.

00:30:55: Yes.

00:30:55: The Merchant Is also an acquisition channel for you so merchants should bring their customers to Pimpay.

00:31:01: Now, how do you convince a baker?

00:31:03: A hairdresser or local shop to actively advertise for the new

00:31:07: system?".

00:31:08: An honest answer!

00:31:09: We don't really ask the merchant much advertising – that's not our model….

00:31:14: we first give them an immediate economic reason to use Pimpaya.

00:31:17: They save transaction fees from the first month.

00:31:21: Additionally they get a loyalty and marketing tool that smaller merchants in this form practically don't have today.

00:31:27: Then we put a QR code on the counter and more than that isn't really needed at the start.

00:31:32: And, where already?

00:31:33: seeing in practice in current friends & family stage every new merchant brings us an average of around eight consumers without paid consumer marketing.

00:31:43: That's decisive for our case in future.

00:31:45: The merchants don't do it because they ask them to or give their money.

00:31:49: They make economic sense for them and thats exactly why this Merchant-led acquisition loop is so strong.

00:31:57: Yes, you position Pimpay not just as a payment app but also as marketing and loyalty platform.

00:32:03: Is Payment ultimately the entry point into larger merchant ecosystem?

00:32:08: Yes!

00:32:09: Payment is an entry-point and that's our strategy too.

00:32:12: As soon as a merchant is on board with us we have something almost no other business can use today Real transaction data Who buys what where when at which merchant.

00:32:22: From that emerges a local CRM, based not on advertising but real-buyer data.

00:32:27: For the merchant it means better customer retention and more targeted offers.

00:32:31: for local campaigns with measurable repeat sales.

00:32:34: For consumer or regional a kind of super app emerges pay collect points discover local offers support merchants and sports clubs later events mobility or further services integrated directly into Pimpay.

00:32:48: we start with payment because payment is the most frequent point of contact between merchant and customer, but the goal is bigger.

00:32:56: It's truly a digital operating system for local

00:32:59: retail.".

00:33:00: Yes exciting!

00:33:01: And you already have over one hundred and fifty merchants before launch... ...and several hundred consumers.

00:33:07: What traction is truly decisive to you?

00:33:10: Is it the number of merchants?

00:33:11: The transaction volume, the repurchase rate or is something else entirely.

00:33:15: At the start everyone practically looks at a number of merchant.

00:33:18: I think that's also one our important metrics.

00:33:21: That understandable too but its not most important thing and not the most important number.

00:33:26: for us.

00:33:27: Decisive factors right now are how many active checkouts there really?

00:33:32: The transaction volumes per checkout Repurchase rates and consumer activation per merchant.

00:33:39: So how quickly can a merchant be activated?

00:33:41: And why, because a merchant on the list isn't yet a functioning model.

00:33:46: We can relatively quickly onboard merchants with the premium model but if they don't generate transactions then that's not really approved for us.

00:33:54: so we need real transactions That show Pimpay works in everyday life.

00:33:59: Our break-even model is based on active checkouts.

00:34:02: What's decisive Is How Many Transactions An Active Checkout Processes Per Month The second number that's central for us, each merchant currently brings us on average as mentioned around eight consumers without marketing.

00:34:16: That also shows that the marketing and acquisition of end customers works.

00:34:21: investors shouldn't just believe we can onboard merchants.

00:34:25: they should see that merchants generate transactions.

00:34:29: transactions generate repeat buyers and thus organic consumer growth emerges.

00:34:34: I've learned you're starting in Romandy and then want to scale nationally.

00:34:40: Now, what are the most important KP is that need to be met for you to say so?

00:34:46: now we have proof of concept?

00:34:48: We can tackle all.

00:34:50: Switzerland

00:34:51: as mentioned it's not about collecting many merchant logos possible at the beginning but our model is locally replicable.

00:35:01: four things first activation rate As mentioned, how many merchants are truly active after a few weeks?

00:35:08: Second, transaction density.

00:35:11: Does enough usage emerge in the neighborhood or region for Pimpay to become visible and relevant?

00:35:16: And third consumer repeat – does customers pay multiple times with their Pimpaya Wallet?

00:35:22: That's actually when Habit starts to form for users!

00:35:26: Fourth also the whole organic acquisition How many new consumers do an active merchant bring without us having to financially incentivize them.

00:35:36: If we see in Romandy that these four values work, then we don't just have traction—we actually have a complete playbook.

00:35:43: and this playbook... We can roll out city by city region-by-region across all of

00:35:47: Switzerland.".

00:35:48: And payments are market with strong network effects!

00:35:51: You mentioned it….

00:35:52: What's your plan to crack the classic chicken & egg problem?

00:35:55: Merchants need consumers but consumers need more and more merchants To get this wheel.

00:36:01: you talked about turning.

00:36:02: We're convinced.

00:36:03: the classic chicken and egg problem arises when you have to expensively acquire both consumers and merchants simultaneously.

00:36:11: We take a different approach, we start with The Merchant because The merchant has strong economic pain.

00:36:17: they save fees immediately get a loyalty tool They have direct reason to accept Pimpay.

00:36:22: Then the consumer comes to check out scans QR code pays rewards and has a reason.

00:36:28: come back.

00:36:29: We're already seeing that in the tests we are now doing in Romandy.

00:36:33: There, each merchant is already bringing us around eight consumers right now.

00:36:37: Additionally, were not building nationally and broadly but very locally.

00:36:41: first create density of the region Enough merchants enough touch points enough repetition.

00:36:47: then activate the consumer's right in this region.

00:36:50: That also isn't a watering can approach it.

00:36:52: actually controlled network effect.

00:36:54: build up Start locally, create density and then replicate the playbook in other regions.

00:37:00: You're on a financing round via Umnium and are targeting long-term very ambitious numbers around seventy two million Swiss francs in revenue and forty three million Swiss Francs EBITDA in year seven.

00:37:14: What do investors need to believe now for this story to work out?

00:37:18: And what's the biggest risk on their way there?

00:37:20: Investors need too!

00:37:22: Believe in Three Things at The Core.

00:37:24: First, that we're capable of acquiring several thousand paying merchants in Switzerland.

00:37:30: That's a realistic goal – it is ambitious but not unrealistic!

00:37:35: This corresponds as mentioned to less than twenty-five percent of our potential Swiss retail segment.

00:37:41: The problem is real because small merchants today structurally have worse payment terms then large players.

00:37:48: Second, TWINT can't simply copy our model without attacking its own revenue models.

00:37:54: TWINT is extremely strong in the market, but precisely because of that it's also bound to its existing.

00:37:59: pricing and banking models are somewhat trapped.

00:38:03: Peer-to-peer is free.

00:38:04: Larger merchants have negotiating power.

00:38:07: We saw that with Galaxis one or two years ago And economic pressure ultimately falls on SME segment.

00:38:14: Pimpay is built from ground up differently Closed loop Prefunded Merchant first Without scheme costs Per transaction.

00:38:24: Third, Switzerland is not the end destination.

00:38:27: Switzerland is the proof.

00:38:29: if we can show in a demanding twint dominated market that small merchants switch to cheaper local payment and loyalty systems then That's very strong signal for other European markets.

00:38:39: I was just this past weekend in France And there they still actually have check payments.

00:38:45: so you can imagine There's a real need for digital payment systems.

00:38:49: Francis of course The logical first step from Romandy.

00:38:53: We're starting from Rommendi.

00:38:54: They speak the identical language, The merchant structure is similar and the pain is comparable.

00:39:01: Then also Germany Italy Spain.

00:39:04: Those are markets with millions of local merchants And they same unsolved problems.

00:39:09: Payment is expensive Loyalty is fragmented Small merchants have no real digital customer interface.

00:39:16: But the biggest risk isn't idea!

00:39:19: The biggest risk for us Is execution speed.

00:39:22: Can we cleanly deliver the Swiss proof, build local density and then scale fast enough before a well-capitalized provider spots the same gap an attacks it?

00:39:32: Well Switzerland is a bit protected because big well capitalised providers aren't exactly targeting or attacking Switzerland.

00:39:40: But I think that's our point.

00:39:41: And thats why were not focusing on maximum breadth right now but generating this exact density replicating Clean Unit Economics and making a clean rollout replicable.

00:39:52: I think the international market is an option for investors, but Swiss-proof is now our obligation as Pimpay to show that it works.

00:40:01: Wonderful!

00:40:01: Thank you very much Andrej for this conversation with all of the best in the further build out of Pimpaya.

00:40:08: Thank you Max, thank both.

00:40:09: That was fun and i wish you a lovely rest of evening.

00:40:12: So let's get into the transactions.

00:40:16: And quite a bit has happened here to giving us a nice close for the short summer break from burn rate.

00:40:21: Yes, Prem dot AI is an AI infrastructure startup from Lugano and it's reportedly currently raising a series A financing of one hundred million.

00:40:31: Yes, the round wasn't really discussed all that much surprisingly because it's actually quite a big deal.

00:40:37: So it also wasn't widely recognized in the ecosystem.

00:40:40: The targeted valuation is said to be at least five hundred million dollars and the Round is expected to close In third quarter of twenty-twenty six.

00:40:48: yes It certainly important put this context.

00:40:50: This as mentioned not yet reported closed round but rather an ongoing fundraise.

00:40:58: If the round comes together at these terms, it would however be one of the biggest Swiss AI transactions

00:41:24: from open AI, Anthropic or another third party provider.

00:41:28: And the product is called Fluso and it's positioned as an encrypted AI workspace that runs agents and automations within the customer's own infrastructure.

00:41:39: This can be a private cloud virtual private cloud Or even completely air gapped on-premise environment according to company.

00:41:46: The core is sensitive data or sensitive data shouldn't leave the company.

00:41:51: Yes, the target customers are organizations with very high requirements for data privacy control and confidentiality.

00:41:59: So in particular hedge funds law firms financial service providers compliance teams And other regulated companies.

00:42:07: For these customers AI isn't just a productivity question but also A governance question.

00:42:14: so trading strategies for example legal documents customer data or internal knowledge bases simply can't flow into external cloud models.

00:42:24: That's well known and that is exactly where Prem comes in.

00:42:28: AI should become usable without the organization giving up data sovereignty.

00:42:33: Yes, it also exciting if we briefly look back at fundraising history.

00:42:38: Prem raised a seed round of fourteen million US dollars in twenty-twenty four.

00:42:43: among the investors was David Maisel, The founding chairman of Marvel Studios.

00:42:47: A big name that everyone certainly knows.

00:42:49: and also Fan Zhang was involved.

00:42:51: That's one of the co founders of Sequoia Capital China So Hong Zheng so prominent names Participated.

00:42:58: The round was then supplemented with a bridge of six point one million, and the valuation was also disclosed.

00:43:05: that was around two hundred million US dollars already at that time.

00:43:09: And if Prem now raises a hundred million at evaluation over five-hundred That would be yes A great increase compared to the Bridge Of course.

00:43:17: Seed Round Indeed One big series A rounds.

00:43:20: we have on the program here in Switzerland this year.

00:43:22: The

00:43:23: actual investment case, we took another look at this before the show is the thesis of the end-of-rented enterprise intelligence.

00:43:31: So many companies today use AI via API access to large model providers.

00:43:35: that's fast and convenient as we know.

00:43:38: but every API call potentially also means data leakage.

00:43:42: it means external dependency And also legal uncertainty.

00:43:47: At the end of day and Prem takes the counter position.

00:43:50: Companies with sensitive data don't want to rent AI, they want to control it audit and run on their own infrastructure.

00:43:59: With that Prem is in the broader trend around sovereign AI private AI and enterprise AI governance.

00:44:06: but In our eyes these are all important future topics.

00:44:09: Yes!

00:44:10: And technologically its not just about self hosting models.

00:44:13: Prem wants deliver entire stack from model operation & inference through agents all the way to the application layer.

00:44:20: That's important because many self-hosted AI offerings are rather toolkits that companies have to assemble themselves.

00:44:29: Prem is trying to turn it into a finished product and Fluiso is meant for open weight models, automate workflows... ...and be able to integrate into existing enterprise processes.

00:44:42: So the bet here is security alone isn't enough.

00:44:45: a private i platform also has to be easy enough to use that teams can actually us it in their day today.

00:44:51: yes the hundred million is meant to flow primarily into team building and product development strategically.

00:44:57: The goal here is to develop premm from an infrastructure and developer platform, for regulated and data intensive industries.

00:45:09: That's quite a statement, the competition is however very strong.

00:45:13: it must be mentioned.

00:45:15: alongside large cloud and data platforms like Databricks many self-hosted and private AI solutions are emerging And also European providers like Mistral or Aleph Alpha are addressing parts of the sovereign AI market.

00:45:29: so Prem's chance lies In our view, not just in playing the market via models but via a usable secure application layer for companies that don't want to give up control of their data.

00:45:41: We'll definitely keep you updated on what happens there!

00:45:44: But let's now get into the second transaction.

00:45:47: Memo Therapeutics – A biotech company from Schlieren is being acquired by French pharmaceutical company Ipsin.

00:45:54: The deal structure foresees a payment of two hundred million at closing, plus a success-based milestone payment that can increase the transaction value to more than seven hundred million euros.

00:46:17: That's clinically very relevant because it endangers the function of the transplanted organ and in the worst case can lead to graft loss.

00:46:24: Petravitok, that is a bit-of-a-tongue twister blocks attachment or entry into host cells which prevent further viral replication.

00:46:33: The target group initially is kidney transplant patients who BK polyomavirus infection represents high medical risk.

00:46:41: From a commercial perspective, a possible product would later be directed at transplant centres, nephrologists and specialised clinics.

00:46:48: The drug has received a fast-track designation from the FDA And in the EU have received orphaned drugs status.

00:46:55: Both underlined that this is an indication with high unmet medical need.

00:46:59: Yes!

00:46:59: The deal interesting for two reasons.

00:47:02: First Ipsen is specifically acquiring a single clinical lead asset with phase two data and clear rare disease logic.

00:47:11: According to Ipsen, the totality of data from The Safe Kidney II study supports Everything that doesn't belong to.

00:47:27: Petravitok is being spun out beforehand into a new company called MemorizeBio and remains with the existing memo shareholders.

00:47:35: Yes, for Ipsen, memo is another building block in an active M&A strategy around rare diseases oncology and specialty indications And For The Swiss Biotech Ecosystem it's Another Strong Shlier & Exit.

00:47:47: Investors like Iosis Capital Kerma Partners Purios Bioventures Swiss Canto and several others receive a clear exit path here while through Memorized Bio, part of the tech platform can be continued in the ecosystem.

00:48:02: Strategically, the deal shows that Big Pharma is ready to make substantial upfront payments for clinically validated differentiated assets in small but highly relevant patient groups.

00:48:13: And then yes...to also pay enormous milestone packages!

00:48:16: Let's

00:48:17: get into the last transaction...Talentier.

00:48:19: Exciting name.

00:48:20: it draws me to Palantir.

00:48:22: Maybe this will have some brand fringe benefit we'll see.

00:48:25: But TALENTIER is an Austrian Swiss B-IIB FinTech and has now closed the seed round of four million euros.

00:48:32: The Round was led by Redstone VC with participation from Inovia Capital, Shapers, Tenity & several other investors.

00:48:40: The company is regulated in Switzerland and has also built its AML and compliance team there.

00:48:47: Yes, Talentiaire is building an AI native payout infrastructure for companies that need to pay out many recipients globally such as freelancers creators external teams or partners.

00:48:58: the platform handles the entire pay-out process data preparation compliance tax logic recipient onboarding.

00:49:06: Additionally, Talentia uses stablecoin-based settlement to process international payouts faster and more cheaply.

00:49:13: The first use cases come primarily from the creator music & platform economy.

00:49:18: There individual revenues often have to be distributed too many recipients in different countries, currencies and regulatory environments.

00:49:26: Tlentier processes according to its own statements all ready today with a six-person team payouts.

00:49:33: the seven figure range per day is targeting next an annual payout volume of one hundred million euros.

00:49:41: Yes, what I find exciting is that Talentiaire doesn't just offer payment processing but takes on regulatory responsibility.

00:49:49: As a kind of merchant-of record on the payout side, Talentiair takes care of compliance tax treatment and recipient onboarding while customers retain their brand and recipient relationship.

00:50:02: In doing so The company addresses a problem many international platforms know.

00:50:07: Collecting money is today sometimes almost already easier, cleanly and quickly in a compliant way than paying out.

00:50:14: The capital is meant to flow into expanding the AI native payout platform further developing the merchant of record infrastructure.

00:50:22: an international expansion.

00:50:23: Long term, Talentiaire wants to become the global standard solution for money out processes.

00:50:30: Strategically that's an exciting infrastructure case at the intersection of AI stablecoins compliance and Global B-to-B payouts.

00:50:40: so That was it for Burnrate The VC Insider podcast.

00:50:43: if you want To support our podcast subscribe to the newsletter And share It within your network.

00:50:49: Thank you very much for listening.

00:50:51: We're heading off into the summer break and we'll be back with you in August,