The Swiss financial center enjoys a leading position internationally, and its contribution to Switzerland’s GDP (around ten percent) makes it an important pillar of the Swiss economy. SIX plays an important role for the financial center. It operates the infrastructure and safeguards the flow of information and money between parties. The investment strategy of SIX FinTech Ventures, our corporate venture fund, is derived directly from this central duty: to ensure that the financial center moves with the times and remains competitive.
Our Investment Strategy
SIX FinTech Ventures invests total of CHF 50 million venture capital in technologies and solutions with the potential to ensure the competitiveness of the Swiss financial center. The aim is to invest in 15 to 20 startups during the next two to three years. These could be in the FinTech sector, but also SecTech, RegTech or any other xTech solutions. Where the startup currently operates is immaterial. We invest in Switzerland, Europe, and the rest of the world. However, the company must offer a benefit for retail and/or business clients in the Swiss financial center. We finance business models that are already generating revenue, as well as highly experimental approaches that still require some development prior to their market launch but that could be relevant in the long-term future. The most important thing for all of the investments is that they be scalable, and have the potential to become something big. These could be business models that serve a current market mechanism but are much more efficient, that question existing mechanisms and do things differently (disruptors) or that are completely novel and fill a gap in the market.
Our investment targets are usually startups in the seed or series A phases, meaning that they already have a proof of concept or (even better) a proof of market and are looking for between CHF 250k and CHF 2 million of capital for their future growth. During the process we assume the role of lead investor, and rather than being the sole investor, we usually work seek together with the startups other investors who add further value.
Our Value Added
We want to invest for the long term, and work in partnership with the startup team. After the initial round of financing, we also assist startup founders with subsequent rounds and typically support them actively for between five and seven years through a seat on their management boards before exiting. We offer many years of expertise on working with startups from the F10 FinTech Incubator & Accelerator, as well as a large network of companies in the financial sector (e.g. banks). But most importantly, the SIX brand represents stability, security and trust, and that is a crucial door opener in comparison to banks in the B2B sales cycle. Investment by SIX represents long-term partnership and support.
Our Investment Process
Our entire investment process typically takes between two and six months. Founders should therefore give some thought to their next financing measures at an early stage. Startups that would like to inquire about receiving financing from us should contact us and submit their idea and pitch deck via our website. An investment manager will then evaluate the documents. This initial evaluation usually takes one or two weeks. If we are interested we will invite a startup to an evaluation and introduction phase. During this phase we meet with the founders several times in order to gain an understanding of their business, the market, the competition and the structure of their company. It is also important to have the right chemistry between the founders and the investment team since we will be working together in the long term. Following this evaluation, which takes between two and four weeks, the investment manager submits the deal to the Investment Committee (consisting of the CFO of SIX, the Business Unit Head Innovation & Digital and the Head SIX FinTech Ventures). This committee reaches a decision regarding an investment. In the event of a positive decision to invest, a due diligence process (lasting between two and four weeks) is carried out. As the lead investor, we discuss the terms of the deal with the startup throughout the process. We summarize the most important commercial and legal conditions (such as volume, pre-money valuation, co-investors, liquidations preference, drag and tag along, preventing dilution, ESOP, vesting, information rights). The due diligence process is also valuable for the founders because we provide external feedback at the end. With the outcome of the due diligence process, the investment committee reaches a final decision regarding the investment. The contracts, such as the shareholder agreement and investment agreement, are then negotiated and signed. Then we celebrate the joint investment! That is when the real work as an investor begins, which is to help the startup with its growth process until it achieves success.
If you are now thinking “That sounds like just the ticket”, then we would invite you to send us your documents directly via the SIX FinTech Ventures contact page. We can also regularly be found at conferences or the F10 Fintech Incubator & Accelerator. Our goal is to grow with you and to lead Switzerland’s financial center into the digital future of the new millennium.