Investment

Swiss venture fund wants to be the world’s most innovative – it’s attracting the attention of family offices

Verve Ventures of Switzerland has won the backing of family offices in its bid to become a top European startup firm. And, as ever, their responses are very different. 

Co-founder Lukas Weber says: “We work mainly with entrepreneurial families that don’t have in-house venture capital expertise but want to have the final say in what companies they invest in. 

“Some help by opening doors, or exchange ideas with the next generation of entrepreneurs while others are silent backers of technological progress they deem relevant.”

Not short of ambition either, Weber’s co-founder Steffen Wagner wants to “build the world’s most innovative venture capital firm”

Verve has come across new generations teasing out an opportunity, seniors sign the cheque. Some seniors bring passion as a result of their interest in a sector. Others offer business experience, or a background in medicine, which can inform the investment debate. 

Others are happy enough to develop a diverse asset base by investing in deals managed by professionals. Verve is planning to cater for them by launching a startup fund, according to analysts.

Weber chooses his words with care: “We’re working on ways to accommodate family offices who like what we do, but just want access to high-risk assets in a diversified and conservative way.”

Verve, like many family offices, is fascinated by the potential in technology. One recent startup is Qnami, which uses sensors to measure the behaviour of atoms at a quantum level. Beekeeper offers a sophisticated mobile platform, boosted by Covid-19 requirements to mobile workforces. 9T Labs has used carbon fibre technology to achieve efficient 3D Printing. Verity has pioneered indoor drone manufacture. Aktia continuously measures blood pressure through optical sensors worn on the wrist. Oncoda offers personalised drug treatments for cancer. And so on. 

Verve has been developed by Lukas Weber and Steffen Wagner, co-chief executives. Weber served as a software engineer at Goldman Sachs in 2005 before setting up projects elsewhere at the interface between finance and tech. 

Weber says family offices want opportunities: “to broaden skills in private markets and find a way to access startups that balance the shares of mind and wallet.”  Verve encourages problem-solving between startups and investors: “There are some answers you simply cannot Google.”

Not short of ambition either, Weber’s co-founder Steffen Wagner wants to “build the world’s most innovative venture capital firm”. He also helps the European Space Agency and CERN in their quest to incubate tech-driven strategies.

He also advises the Swisscanto Growth Fund backed by Zürcher Kantonalbank – Switzerland’s third-largest bank and a minority investor in Verve. Another large client is Nest Sammelstiftung, a multi-pension provider to Swiss businesses. A third is Swiss Immo Lab which advises the local real estate sector.

As Switzerland’s most active startup firm, Verve draws on tech-driven startups at its educational institutions, as well as local financial support. In a statement, its portfolio company Verity confirms: “The team at Verve Ventures has been very helpful in connecting us within the Swiss ecosystem.” 

As time goes on, Verve hopes companies will let it participate in late-stage funding rounds following its continual advice on value creation.  This will help it win institutional business.

The sector backdrop is encouraging. Data from Swiss Startup Ticker shows that the total value of Swiss startups doubled to $1.8 billion in the first half of 2021 although overseas venture capital was prominent. 

Verve cannot directly advise family offices beyond offering a general view on risk. But it gives them the chance to talk to corporate founders on Zoom, along with its team of 15 analysts. 

Verve likes to hire researchers who are smart, ambitious – and modest. It is happy to leave space for their ruling passions. One technical analyst, Bernhard Glas, recently hit the jackpot with a team that won a tunnelling award sponsored by Elon Musk’s Boring Company. Bernardo Bizzini, an investment associate, has a PhD from Cambridge University and is a fencing champion. 

Verve says families should consider diversifying across ten or more ventures to improve their chance of backing companies with multiple returns. 

Every portfolio offers a different return but Verve’s so-called startup journalist Eugen Stamm is more than happy with his return of 15% a year from his portfolio of 30 deals.

According to Crunchbase, Verve has now made 158 investments and seven exits.  Fees for large investors are 85 basis points and 15% of performance over ten years, plus an access fee and structuring costs. Access to specific investment opportunities normally start at $270,000, ranging up to $1.10 million.

On any day Verve may have a dozen live financing projects. It is adding between 40 to 50 deals a year after screening out thousands. Weber says he likes deals that are “investment-ready”, rather than leading to an endless haggle with founders on terms and conditions.

Recent Verve exits include Astrocast, which carries out internet connections from space, MyCujoo, a sports media outlet and Bring! a shopping app acquired by Swiss Post.

Recent deals include Locatee, a provider of workplace analytics, EstateGuru, a platform for property loans and Fractory, a one-stop shop for metal fabrication.

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