There is a friendly rivalry between French-speaking Lausanne and German-speaking Zurich for Switzerland’s tech crown. 

The Zurich crowd sometimes dismisses Lausanne — with its lakeside, wine-region location — as Switzerland’s Cote d’Azur, a lazy holiday town. 

But Patrick Barbey, managing director at Innovaud, the innovation support agency for the Vaud region, points out that Lausanne creates about the same number of startups as Zurich does, with only a third of the population. He told Sifted how the city’s tech community manages to punch above its weight. 

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1) What is this city’s biggest strength as a startup hub? 

The Ecole Polytechnique Federale de Lausanne creates a large number of startups every year, particularly in deeptech. The institution is only 50 years old, but thanks to generous backing by the federal government, it has been able to be very ambitious in recruiting the leading professors.

The canton of Vaud, in general, has a unique concentration of research organisations – the Lausanne University Hospital [the leading hospital in Switzerland and ranked ninth in the world] is a leader in clinical drug trials and helped create GTX Medical, a startup that is developing a spinal cord implant to help paralysed people walk again. 

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Lausanne’s famous hotel school, the École hôtelière de Lausanne, and Ecal, the school of art and design, turn out graduates with skills that complement the engineering and medical skills. A short train ride away, in the Vallée de Joux, lies the heart of the Swiss watchmaking industry, meaning there are people in the region with microengineering skills that many of the startups need.

There is also a lot of diversity, the canton of Vaud strives to offer work permits to tech talents from abroad, and 70% of founders are non-Swiss. 

2) What is the biggest challenge?

The challenge is to increase the density and attractiveness of the ecosystem. In 10 years there will be only five tech ecosystems in Europe that really matter if you want to get things done and Lausanne has a chance of being one of them.

We are trying to show US companies who want a European base that this is a good place to be because of the expertise and research institutions here, as well as federal incentives that can help facilitate things like tech transfers.

3) In what ways has it changed over the last five years?

I have seen a big change in risk-taking attitude. Young people no longer automatically go for a first job in a bank, they are more willing to try setting up a startup. They have the attitude of changing the world.

We are also seeing more seasoned entrepreneurs in the ecosystem, the pool of people who have built a startup before is growing. They might have worked in a tech company in the US and moved back to Switzerland after having children, and are now coming in either as advisors or angel investors.

4) How easy is it to hire people?

Developers can be expensive with annual salaries of  SFr80,00 to SFr120,000 (72,000 to 108,000), although that is not expensive compared with Silicon Valley. Often companies can also save on costs by having remote teams doing much of the development work in eastern Europe and just having a coordinating function in Switzerland. 

What is appreciated about Switzerland is that it is easy to hire and fire people — you are not stuck with someone for three years if you make the wrong hire, there is a lot of fluidity. 

5) How easy is it to find funding?

They say that Switzerland has a lot of money but not much capital. It’s a joke, but it is true that there are a lot of rich individuals here who prefer to invest in the Nasdaq or property, rather than in startups. We are slowly seeing the rise of local investment funds, however, and it is now relatively easy to raise a seed round up to around SFr 500,000 (€450,000) for a good project. 

The higher up you go in the rounds the more foreign investors have to come in. There is some concern about being too reliant on foreign investment so the government is launching a fund of funds with around SFr500m (€450m) to invest in local Swiss funds. 

We’d like to replicate that on a cantonal level — we have SFr25m (22m) earmarked so far.  The Foundation for Technological Innovation also gives grants and loans of SFr100,00 to 500,000 to startups based in western Switzerland. Before startups are in a position to raise series-A round, this can be a good boost. We would like this to be increased to bigger loans of up to SFr2-3m.

6) What is the social side like?

Lausanne is not quite Paris, but it does have a French touch, with plenty of cafes, restaurants and theatres — as well as the lakes and mountains. Sometimes called the Cote d’Azur of Switzerland, this can sometimes be said dismissively by people in Zurich, but there is a great quality of life here.

Quick questions

Where is the best place to meet people? 

For machine learning fans: Machine Learning Meetup

For sport techies: The SPOT

For entrepreneurs: Petit-Déjeuner Startup PME organises breakfast events once a month.

What is the best event/meetup to attend?

Startup Champions Seed Night is one of the major startup events in the region, with pitches, booths and networking, co-organized by EPFL and Venturelab.

Drone enthusiasts should check out EPFL Drones Days

Lausanne’s food entrepreneurs also arrange regular meetups

Scaleup Vaud is a group for companies that have had 20% growth for 3 years. It organises a meetup every 3 months.

Who do you need to know?

Jean-Philippe Lallement, EPFL Innovation Park Director

Juliana Pantet, Y-Parc Director

Jordi Montserrat, cofounder of Venturelab and Venture Kick, two renowned startup support in Switzerland

Rémi Walbaum, chief innovation officer of EHL and Chairman of Innovaud

Nasri Nahas, chief executive of Biopôle SA

Where is the best location to work? 

Depending on your industry, the region offers hosting in seven different Innovation Parks. EPFL Innovation Park is a strategic place, but if you are in life science you should definitely go to the Biopole.

Which are the companies everyone wants to work for?

For hot startups and scaleups, see: http://scale-up-vaud.ch/en/the-scale-ups/list-of-companies

There is also a list of leading companies here: https://www.invest-vaud.ch/assets/our-assets/leading-companies

What are the biggest startup success stories from Lausanne? 

Nexthink. This EPFL spinout uses real-time analytics and employee feedback to help companies manage their IT networks and ensure that workers are not getting frustrated with tech problems. The company recently raised $85m.

Abionic: Founded in 2010 as a spinoff from EPFL, Abionic is commercialising the world’s fastest allergy diagnosis platform, offering healthcare professionals a 5 minute point-of-care diagnostic tool.

Mindmaze: Switzerland’s first unicorn, this EPFL spinout is pioneering a breakthrough computing platform to enable new neuro-technology applications using AI and VR.

Which are the most exciting companies to watch?

Astrocast, building a network of 64 nanosatellites for IoT applications, two already in orbit.

Agrosustain, an agritech startup from the University of Lausanne, offering efficient organic treatments against broad range of fungal pathogens.

Teserakt: securing IoT data. 

Mirrakoi, an ICT startup from EPFL, provides a novel software technology to create and design 3D digital products significantly faster and more intuitively than with existing technology, using  ‘augmented computer aided design’ (CAD).

MeduSoil: a materials science startup that developed a ground stabilization solution that is environmentally friendly

Swiss Motion Technologies, a medtech startup from the HEIG-VD applied school, produces tailored orthopaedic devices through novel 3D printing technologies.

Dronistics: a new concept of drone for “last centimeter delivery”.

Which newsletters or sites are the ones to follow? 

Newsletter and news website : www.startupticker.ch

Which universities and corporations are influential in the region? 

Universities: EPFL, UNIL, CHUV, HEIG-VD, EHL, IMD

Corporations include:  Nestlé, Logitech, Bobst, Swissquote, SICPA, Medtronic and more.

Vaud Factfile

Population of the city 137,810
Number of startups 500+
Total investment in past year 267.5 CHFm
Average developer salary CHF 78,000- 120,000
Price per square meter for office space CHF150-500/sqm2
Price of coworking desk CHF 300-550
Tax rate 13.78%

 

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