Why Climate Tech has Become a Strategic Funding Priority in Switzerland

In 2023, Swiss climate and cleantech startups attracted more than CHF 1,8 BN in venture capital, according to the Swiss Venture Capital Report, accounting for roughly one third of all startup funding in the country despite a sharp overall market contraction. At the same time, the Federal Office for the Environment estimates that meeting Switzerland’s net-zero target by 2050 will require annual investments of CHF 30 BN to CHF 35 BN in energy systems, buildings and industrial processes. The scale of this financing gap explains why public funding instruments, targeted accelerators and private capital have converged around clean technology, turning climate innovation into a strategic pillar of Switzerland’s economic policy.

Public funding as a risk-sharing mechanism

Public funding frameworks form the backbone of Switzerland’s cleantech financing landscape. Rather than relying primarily on direct subsidies, federal instruments are designed to de-risk private investment and accelerate market entry. The most prominent example is the Technology Fund administered on behalf of the Confederation. Established under the CO₂ Act, the fund provides loan guarantees of up to CHF 3 M per company for technologies that demonstrably reduce greenhouse gas emissions. By the end of 2024, the fund had issued guarantees exceeding CHF 400 M across more than 100 companies, according to official disclosures.

The economic logic is straightforward. Capital-intensive climate technologies often struggle to secure bank financing during early commercialisation, when revenues are limited and technical risks remain. Loan guarantees lower financing costs and extend maturities, enabling firms to invest in pilot plants, software scaling or manufacturing capacity without excessive equity dilution. From a public finance perspective, the contingent nature of guarantees limits fiscal exposure while crowding in private capital.

Complementing this instrument are federal and cantonal innovation agencies that provide grants, coaching and project financing. Innosuisse, the Swiss Innovation Agency, committed more than CHF 1 BN to applied research and startup support between 2021 and 2024, with energy, environment and sustainability among the fastest-growing thematic areas. These programmes link startups with universities and corporate partners, ensuring that public research funding translates into commercially viable technologies.

Early-stage capital and structured acceleration

While public guarantees support scale-up, early-stage ventures depend on non-dilutive capital and structured guidance. Climate-focused accelerators have gained prominence as intermediaries between public funding and private investment. The KlimUp programme, supported by municipal and cantonal actors, offers early-stage startups an initial CHF 35 K grant and access to co-financing of up to CHF K. This structure reflects a shift in Swiss innovation policy towards blended finance, where public funds catalyse private investment without imposing rigid ownership structures.

More broadly positioned accelerators also play a significant role. MassChallenge Switzerland, based in Zurich and Lausanne, supports startups across sectors but has steadily increased its focus on climate and energy solutions. Since its launch, the programme has distributed more than CHF 7 M in non-dilutive awards and facilitated over CHF 10 BN in follow-on funding globally, according to its own reporting. For Swiss cleantech founders, access to international mentors and corporate partners is often as valuable as capital, particularly when scaling beyond the domestic market.

These programmes address a structural challenge in climate innovation. According to OECD analysis, cleantech startups face longer development cycles and higher upfront capital requirements than digital ventures. Accelerator models that combine technical validation, regulatory guidance and investor access help shorten time to market and reduce execution risk.

Internationalisation as a funding strategy

Given Switzerland’s limited domestic market, international visibility is critical for cleantech scale-up. Venturelab’s Venture Leaders Cleantech programme exemplifies how export-oriented funding support has become embedded in the ecosystem. Each year, a selected cohort of startups participates in international roadshows, typically in the United States and Asia, meeting institutional investors, industrial partners and policy stakeholders. Alumni data show that Venture Leaders companies consistently outperform peers in fundraising and international revenue growth, an outcome attributed to early exposure to global markets.

Regional networks reinforce this outward orientation. CleantechAlps, supported by Western Swiss cantons, promotes collaboration between startups, research institutions and industrial players across Vaud, Geneva and Valais. The region benefits from proximity to EPFL, which alone generated more than 25 cleantech-related spin-offs between 2018 and 2023. Academic research, public funding and industrial demand converge in a geographically compact area, reducing coordination costs and accelerating innovation cycles.

Venture capital shifts towards climate solutions

Private capital remains decisive once technologies move beyond pilot scale. Although European venture markets are traditionally conservative, Swiss investors have increased allocations to climate technology over the past decade. The Swiss Venture Capital Report shows that cleantech investment volumes more than tripled between 2015 and 2023, even as funding for consumer and fintech startups declined.

Climeworks stands as the most visible illustration. The Zurich-based direct air capture company raised more than USD 800 M across multiple rounds, including backing from international institutional investors. While its capital needs are exceptional, the case has reshaped perceptions of what is financeable in Switzerland, demonstrating that hardware-intensive climate solutions can attract global capital if technological credibility and policy alignment are strong.

Investor appetite is also evident at earlier stages. Funds specialising in climate and impact investing report increasing deal flow from Switzerland, particularly in energy software, circular economy and industrial efficiency. Platforms such as CapiWell have emerged to connect growth-stage startups with family offices and institutional investors, addressing a persistent gap between seed funding and large venture rounds. This intermediation function reflects a maturing ecosystem where capital providers and entrepreneurs are more tightly aligned.

Evidence from Swiss cleantech scale-ups

Several Swiss companies illustrate how funding instruments interact across development stages. DePoly, an EPFL spin-off focused on chemical recycling of PET plastics, secured seed funding from private investors and public innovation grants before attracting international capital to build a demonstration plant in Valais. Switzerland generates around 1 M tonnes of plastic waste annually, according to the Federal Office for the Environment, making advanced recycling technologies economically and politically relevant.
SmartHelio, based in Lausanne, develops predictive software to optimise solar plant performance. Supported by the Technology Fund, the company expanded its platform to international markets, addressing efficiency losses that industry studies estimate at up to 15 % over a solar plant’s lifetime without advanced monitoring. By improving asset performance, such software contributes to Switzerland’s renewable expansion targets under the Energy Strategy 2050.

Smart-me AG offers another perspective, focusing on digital infrastructure rather than energy generation. Its cloud-based smart metering systems enable real-time monitoring of electricity, heat and water consumption. With buildings accounting for roughly 40 % of Switzerland’s final energy consumption, according to the Federal Office of Energy, granular data is increasingly central to efficiency policy and dynamic pricing models. Public support helped the company scale deployments with utilities and municipalities, translating policy objectives into operational tools.

Structural constraints and policy trade-offs

Despite strong momentum, the funding landscape faces constraints. Climate technologies often require patient capital, while venture funds typically operate on shorter return horizons. Public guarantees and grants mitigate this mismatch but cannot fully substitute for long-term private financing. Pension funds and insurers, which manage assets exceeding CHF 2 trillion, remain cautious due to regulatory and risk considerations, limiting the pool of domestic late-stage capital.

Administrative complexity also affects access. Startups frequently cite the time and resources required to navigate multiple funding programmes as a barrier, particularly for small teams. Policy reviews by the State Secretariat for Economic Affairs have acknowledged this issue, recommending greater coordination and simplified application processes.

Skills and governance represent further challenges. Scaling climate technologies requires not only engineering expertise but also regulatory literacy and international business capabilities. Programmes that integrate entrepreneurial training with technical funding have shown higher success rates, suggesting that capacity building is as critical as capital provision.

A sharpened funding model with strategic intent

Switzerland’s cleantech funding ecosystem is no longer defined by isolated grants or flagship startups. It functions as an integrated architecture in which public instruments absorb early risk, accelerators professionalise ventures and private capital scales proven solutions. This model reflects a strategic choice to align climate policy with industrial competitiveness.

As climate investment needs rise and fiscal space tightens, the effectiveness of this architecture will be tested. The evidence so far suggests that risk-sharing mechanisms and targeted acceleration can mobilise significant private capital without distorting markets. If regulatory clarity and funding coordination continue to improve, Switzerland is well positioned to translate its climate ambitions into exportable technologies and durable economic value.