Revision of Swiss government's startup fund for emerging markets
SECO Startup Fund Relaunches with a Focus on Emerging Markets
The SECO Startup Fund, a Swiss initiative aimed at supporting entrepreneurs who are not only building strong companies but also addressing real-world issues in their communities, has been relaunched with a commitment of CHF 5m (€5.4m).
Established in 1997, the fund has invested CHF 44m in over 120 companies, including Nairobi-based startup eWaka, which provides electric bikes and a battery-swap network. The relaunched fund will predominantly focus on startups in emerging markets that are less than six years old, making money, but still unable to secure commercial loans.
The fund targets early-stage and growing innovative companies with proven business models that struggle to land traditional growth financing. To be eligible, startups must demonstrate meaningful Swiss ties or align with SECO's cooperation strategy, which focuses on decent work, access to critical goods and services, and climate-smart capacities.
The risk perception that commercial investors have for these countries is high, and the SECO Startup Fund has a thorough due diligence process to assess this risk. The fund offers single-digit interest rate loans and low ticket sizes, starting from CHF 300,000.
The updated eligibility criteria for the fund are more inclusive, such as removing the requirement for one investor to have residency in Switzerland. This opens up opportunities for startups from various parts of the world to apply.
Aliseé de Tonnac, CEO of Seedstars, expressed excitement about the next generation of innovative businesses in emerging markets. She believes that the SECO Startup Fund will play a significant role in fostering economic growth and creating employment opportunities in these regions.
The SECO Startup Fund is managed by advisory and impact investment firm iGravity and Seedstars. The fund aims not only to provide capital but also to facilitate economic opportunities by helping startups grow operations and generate local employment, using tailored financing aligned with Switzerland’s global cooperation priorities.
eWaka, a recipient of a CHF 500,000 loan from the SECO Startup Fund, is a prime example of the fund's impact. The startup, which has a Swiss-backed leadership team, is making a significant contribution to sustainable mobility in Nairobi by providing affordable and environmentally friendly transportation solutions.
The SECO Startup Fund's goal is to create economic opportunity by helping businesses grow their operations and generate local employment through tailored financing mechanisms aligned with Switzerland’s global cooperation priorities. With its relaunch, the fund is poised to continue its mission of supporting innovative startups in emerging markets and contributing to sustainable economic development around the world.
- The SECO Startup Fund, focusing on emerging markets, is committed to providing finance for startups that are making profits but unable to secure commercial loans, thus contributing to financial inclusion.
- As the relaunched SECO Startup Fund offers blended finance, it aims to facilitate economic opportunities and growth by offering single-digit interest rate loans and low ticket sizes to eligible startups across the globe.
- By investing in startups like eWaka, which addresses real-world issues such as sustainable mobility in Nairobi, the SECO Startup Fund is not only fostering business growth but also contributing to the development finance and decent work goals of Switzerland's global cooperation priorities.
