Switzerland built its name as a banking and finance powerhouse generations before blockchain existed. That history of pragmatism and financial sophistication positioned the country well as cryptocurre
Switzerland built its name as a banking and finance powerhouse generations before blockchain existed. That history of pragmatism and financial sophistication positioned the country well as cryptocurrency companies emerged worldwide. Zug, a canton in northern Switzerland, became the focal point. The concentration of blockchain startups locating there grew so dense that people referred to the region as "Crypto Valley." The Crypto Valley Association formed in January 2017 to represent the booming ecosystem. Then, this month, the government in Zug announced a pilot program for e-voting that would store resident identification information on a blockchain, further cementing the canton's embrace of the technology.
A new investment and accelerator firm entered the market with ambitions to advance the sector. Blockchain Valley Ventures, which launched in May, operates as both an incubator and investment vehicle backing blockchain companies. Its founding team includes former executives from IBM, UBS, and SAP alongside Lykke Corp., a Swiss blockchain startup. Heinrich Zetlmayer, the founder and general partner, articulated the firm's direction in a simple phrase: to "build more bridges between global investors and blockchain opportunities."
BVV employs what it terms a "hybrid model," blending traditional venture capital investment with initial coin offerings. ICOs became the preferred fundraising mechanism for blockchain projects, and Switzerland emerged as a leading hub for them. The hybrid approach, the firm maintains, will "optimize not only the capital-raising of BVV portfolio companies but to serve as a key tool in accelerating their growth and business development, offering significant benefits compared to more conventional investment mechanisms." Zetlmayer explains the logic: "We are building a global investor circle to connect ICOs with global investors in a broader, more structured and sustainable way."
In a recent interview, Zetlmayer discussed the sector's state, the obstacles companies face, and what BVV intends to accomplish.
The Swiss blockchain market displays surprising vigor despite regulatory headwinds. Governments worldwide introduced rules and restrictions on ICO fundraising, yet in Switzerland the sector thrived. "The general ICO is market extremely vibrant," Zetlmayer said. Companies migrate to Switzerland for multiple reasons: deep engineering talent, existing blockchain infrastructure, and what Zetlmayer called Switzerland's "definite infrastructural advantages in accelerating ICOs and blockchain-powered businesses." Some founders choose less-regulated jurisdictions to avoid compliance burdens, but Zetlmayer views this as misguided. Long-term success requires blockchain projects to be "very large and trusted by many users and investors," and that credibility flows from Switzerland's established institutions and regulatory frameworks. "ICOs require craftsmanship and forward thinking. Too many think there are shortcuts that can lead to success." Zetlmayer anticipates further maturation of the market. "In the next 12 months, I believe, we will see the appearance of the first regulated exchanges giving the ICO market a second boost."
Switzerland now ranks among the world's leading jurisdictions for ICO activity. Zetlmayer points to the explanation: "Switzerland can certainly be considered to be one of the leaders in the sector" because of the density of blockchain companies, the fintech firms engaged with cryptocurrencies, and the infrastructure these entities have built collectively.
Running an ICO in Switzerland brings specific challenges. "Nowadays, any serious ICO needs to raise money globally and has to maneuver through the myriad of advisors, which can prove time-consuming and difficult, especially for smaller, newer businesses," Zetlmayer explained. The core issue is access to financial institutions. "The main challenge is establishing banking relationships." Beyond that, companies must achieve legal compliance across multiple jurisdictions and identify cryptocurrency exchanges that will trade their tokens. These complications arise from the international nature of the ICO market, not from Switzerland's particular rules.
To unlock more growth, Zetlmayer advocated regulatory adjustments. "Regulation should be reduced for ICO investments with smaller contributions, such as US$5,000, to make ICOs more easily accessible for retail investors globally. Additionally, we need to facilitate better access to global capital for ICOs." BVV's hybrid model addresses these exact obstacles by making both conventional investment capital and ICO mechanisms available to its portfolio companies.
BVV has begun executing on its vision. The firm is "building a global investor circle to connect ICOs with global investors in a broader, more structured and sustainable way." It is currently engaged with Teleport Global AG, a startup developing a decentralized content delivery network. Additional partnerships are in process. "BVV are currently pursuing several opportunities that are in the final stages of negotiation and will be announced soon."
The firm has set concrete targets for its portfolio growth. BVV aims to have up to 20 companies under its wing by year's end, a mix of seed-stage and established startups. "We hope to invest in many startups, be it at founding stage or after founding, but will remain selective to ensure overall quality," Zetlmayer said. The firm is moving toward that target "very rapidly," he added.
Two investment themes guide BVV. The firm prioritizes blockchain infrastructure and startups that deploy the technology to transform existing business models at industrial scale. "As blockchain technology is so innovative generally, there are many promising sectors which could potentially interest us," Zetlmayer concluded.
