Switzerland offers a fertile environment for innovation, backed by world-class research institutions, investors and support programmes. Nevertheless, the funding landscape is evolving, both at the local and the global level. Investor priorities have shifted, growth capital is harder to secure and founders increasingly need to look beyond national borders. Against this backdrop, we spoke with Sabina Sperisen, CEO of the Lichtsteiner Foundation, and Siew-Veena Sahi, CEO and co-founder of Testmate Health, a Swiss medtech backed by the foundation, about the opportunities and pressures shaping the ecosystem today.

Swiss start-up funding: Kickstarting innovation

Despite its relatively small size, Switzerland punches well above its weight when it comes to healthcare innovation. ‘We’ve got world-class universities, hospitals, multinational corporations and start-ups across hubs in Basel, Zurich, Bern, Lausanne and Geneva,’ Sabina affirmed. ‘This creates very fertile ground for entrepreneurship, particularly in life sciences and health technology.’

Moreover, Switzerland offers a wide range of accelerators and coaching programmes, as well as a high density of business angel and venture capital networks. The Lichtsteiner Foundation occupies a unique position in this landscape. In Sabina’s words: ‘We’re not a business angel or VC. We’re a foundation with a focus on impact investing in the health industry. Importantly, due to our status, we only give money to early-stage, mission-driven healthcare companies based in Switzerland.’

Indeed, the foundation has supported a range of Biopôle-based companies, including Impli, DigeHealth, Limula, SwitchKine and Testmate Health. It represents a crucial source of early-stage funding, helping promising companies get off the ground. Nonetheless, the picture becomes more challenging as companies scale. ‘Once Swiss start-ups get to the growth phase,’ Sabina said, ‘we can’t carry these rounds. Founders need to look beyond the domestic investor base – to the US or elsewhere.’

This was Testmate’s experience. The start-up is developing a rapid test for sexually transmitted infections that can be used in clinics or at home. Testmate secured backing from Swiss investors for its first round and has since attracted investors from the US. ‘Now, I would say around half of our investors are US-based and half of them are Swiss-based,’ said Siew-Veena. ‘In any case, accessing US VCs early on has meant that we’ve always had quite an international footprint, which has been no bad thing for Testmate. In fact, we needed to go outside Switzerland to find advisors who specialise in our business area – which has proved decisive in terms of saving time and avoiding costly mistakes.’

Managing the tightening global investment pipeline

While there continues to be strong support for healthcare innovation in Switzerland, the global funding environment has become more challenging in recent years. Notably, the market has undergone significant shifts in the wake of the global pandemic and geopolitical uncertainties, with investors becoming more selective. Capital remains available, but it’s more concentrated: the current funding rounds happening in the US AI industry are unlike anything ever seen before.

‘I feel like I’ve seen it all over the past few years’, Sabina said. ‘I’m in my ninth year at the foundation and in that time there’s been everything from mega rounds to massive troughs. Nowadays, the market is rebounding – but unevenly. It can be difficult for small ventures to navigate.’

Siew-Veena echoed this sentiment, pointing out an ‘imbalance’ in the funding ecosystem. ‘Venture capital funds, especially in the US, are getting larger and larger, which leads to increasing pressure to deliver exceptionally large returns,’ she explained. ‘This can make it harder for companies in sectors that are underfunded relative to their impact to attract funding, even when the unmet need is substantial.’

Indeed, this pattern only compounds existing funding disparities in a sector like sexual and reproductive health. Despite representing a major public health need, it attracts a disproportionately small share of investment. ‘I find myself spending significant time educating investors about the scale of the problem before discussions can even begin about the underlying technology or business model,’ Siew-Veena said. ‘Added to this, we’re managing investor hesitance around diagnostics in the wake of COVID-19: following the collapse of pandemic-era testing companies, investors have become more cautious about the sector in general, meaning we have to work harder to amplify Testmate’s mission. Strategic partnerships with established healthcare organisations are central to how we validate our technology and build our commercial channel. Those relationships speak for themselves.’

On the flip side, Sabina asserted that the current environment is driving a positive shift towards quality. ‘There is a natural selection process happening,’ she explained. ‘The era of abundant capital allowed some ventures to progress despite relatively weak fundamentals. Now, only the strongest early-stage companies succeed.’

How to stand out in a challenging ecosystem

At a time when investor requirements are becoming more stringent, securing capital can feel like a daunting task. It’s important to ask what exactly investors are looking for. For her part, Sabina shared that, when evaluating opportunities, the Lichtsteiner Foundation focuses on three core pillars: the innovation itself, the commercial opportunity and the talent behind the company.

‘Disruptive, science-based innovation with a credible path to commercialisation is non-negotiable for us,’ Sabina said. ‘But we also pay close attention to the company culture. Diverse teams, pioneering leaders, experienced boards and transparent communication all serve as positive signals, while instability and exaggerated claims are major red flags.’

‘Ultimately, my advice is to be authentic,’ she added. ‘Build trust with your investors through transparency, not hype. There’s always a certain amount of risk involved, but everyone feels more confident when you don’t oversell and remain grounded in reality.’

In fact, the selection process is a two-way street. Siew-Veena shared the founder’s perspective, stressing the importance of mission alignment: ‘Choosing the right investors is just as important as attracting them – especially in a space like healthcare,’ she said. ‘While raising capital is often an urgent priority, there’s no point progressing with investors who don’t share our mission and don’t understand the importance of achieving affordability, accessibility and impact, which may require longer development timelines.’

‘The investment relationship is a bit like a marriage,’ she quipped. ‘You’re going to be working together for a long time, so your long-term objectives and strategy need to align.’

All in all, the rules of fundraising may be changing, but opportunities remain for companies that can demonstrate strong fundamentals, clear market potential and credible leadership. In an increasingly competitive environment, investment depends on finding the right fit between company and investor – and the strongest partnerships are built on shared goals, mutual trust and a long-term commitment to turning innovation into impact.