One in five EPFL spin-offs undergoes rapid development within five years of its creation. One in ten will surpass 350 employees. On the occasion of the Innovation Vice Presidency Days, celebrating the 50^th anniversary of EPFL on November 19 and 20, the EPFL Magazine explores the start-up ecosystem and entrepreneurship support. Risk-taking is becoming part of the culture, but challenges remain.

Developing cutting-edge technology, growing quickly, generating significant revenue—this seems to define the destiny of a start-up. In the public imagination, the big success stories of Silicon Valley are the ultimate goal. In the French-speaking part of Switzerland, particularly at EPFL, entrepreneurial culture has clearly taken root, and more students are considering starting their careers by launching a business. This is reflected in the number of applications for seed funding or office space.

On campus, around 20% of start-ups make it to the scale-up phase, which means rapid take-off—20% growth per year for three years and more than 10 employees—and 10% reach the milestone of 350 to 400 employees. Kandou, Anokion, Nexthink, and Frontiers, to name a few, have passed this stage in recent years. Others, sometimes encouraged by investors eager for a quick return, have been acquired by larger companies. Some technologies developed by spin-offs have even become part of everyday life, such as the Siri voice assistant, which was acquired by Apple.

The Culture of Risk

Risk is clearly not an obvious concept in Switzerland. But things are changing. The experience of major start-up hubs like Silicon Valley, Boston, or Israel shows that the more successes there are, the more they inspire. Entrepreneurs who succeed and stay in the region nurture the ecosystem that helped them grow. “It’s becoming increasingly common for founders of rapidly growing campus companies to help others,” says Jean-Philippe Lallement, director of the EPFL Innovation Park. He estimates it will take another 5 to 6 years for investment funds solely funded by successful start-up founders from the region to emerge. The first one recently launched in Zurich.

Entrepreneurs and industry professionals agree: investors focus more on the founder or a strong team than on the technology. As Deborah Heintze, co-founder of the scale-up Lunaphore, points out, “Our biggest asset was the strength of our team. Proof of this is that our Zurich investors continued to support us when, after a few months of activity, we decided to pivot our product.”

“Early decisions, especially when you’re an engineer learning the ropes of entrepreneurship, are not always the right ones,” says Jordi Montserrat, regional director of the start-up support organization Venturelab. Creating a company is certainly no easy task, and deep motivation is required. “The team must also be ready to dedicate themselves fully to the project for the next five years,” adds Patrick Thévoz, co-founder of Flyability, one of the world leaders in indoor inspection drones.

The Crucial Stage of Fundraising

Fundraising is always a crucial and delicate stage for a company. “There’s the pressure of cash flow, you face rejections, and you have to question your business model,” recalls the entrepreneur. It took Lunaphore, which develops a rapid cancer detection system, a year to secure its first funding. According to Pedro Bados, founder of Nexthink (read the interview), if this process takes too long, it might be time to reassess the product, the business plan, or the team structure.

The number of investments exceeding 10 million Swiss francs has significantly increased in recent years. Whereas there were only three or four on campus a decade ago, today there are about ten each year. “The available money is increasing, but so are the number of projects needing funding,” notes Jean-Philippe Lallement.

The difficulty of securing funding also depends on the field and the amount sought. For Nicolas Durand, CEO of Abionic, a medtech scale-up with 50 employees, the challenge of finding funds is an ongoing issue, as the required investments are substantial, especially for conducting clinical studies. “Support is excellent at the start. But once a company reaches the scale-up stage, things get more complicated, and funding support is still somewhat lacking in Switzerland. In the US, China, Singapore, or France, governments are much more involved,” he regrets.

Bringing a Product to Market is Already a Success

While rapid growth often happens at the start-up phase, some companies hit their stride later, riding the wave of new opportunities. Bluebotics, for instance, which produces operating systems for robots, was founded in 2001, but has only recently experienced unprecedented expansion due to the increasing use of consumer robots.

More broadly, of the roughly 20 spin-offs that emerge from EPFL labs each year, 95% are still active 10 years after their creation. Most continue on as small or medium-sized enterprises. “It’s already a success when a company can bring to market, profitably, what it set out to develop and create jobs in the region,” notes Jordi Montserrat, head of the start-up support program Venturelab.