2018 Startup GUIDE - 10th Edition

COVER STORIES 17
Swisscom Ventures
Interview: Dominique Mégret,
Head of Swisscom Ventures
Dominique Mégret on running a mature corporate venturing
unit, how it leverages the parent company to deliver strategic
and financial value and how the Swiss startup ecosystem is coming
of age.
Swisscom Ventures is one of the most active corporate
venture capital arms (CVC) in the world and Switzerland’s
leading early-stage ICT investor. How did you get there?
It all started in Silicon Valley as Swisscom has been there for the
last 20 years with the objective to bring external innovation inside
Swisscom. Most disruptive innovations in our industry came from
startups outside the telecom labs – if you cannot beat them, join
them! That is why we started Swisscom Ventures in 2007 and capitalized
on those Californian relationships. As we learned from the
best VCs, we started to invest in CH as well with our second-generation
fund. We saw that the Swiss market had actually great potential
with a high quality of proprietary IP at considerably lower valuations
than in the US. Building upon that experience from Silicon
Valley and Switzerland, we recently closed a third fund of more than
CHF 200m that is primarily funded by external institutions alongside
Swisscom as anchor investor. About half of this fund will be invested
in Switzerland, the other half in the USA/Europe.
What kind of objectives do you pursue with your
investments?
We have both financial and strategic objectives: Strategically, we
facilitate partnerships between startups and Swisscom. For the
startups that means access to a potential customer or distribution
channel and for Swisscom access to innovation to reduce our
costs or differentiate our products. On the financial side, it is all
about delivering top returns. Clearly, it is always a balancing act,
to achieve both strategic and financial goals.
DOMINIQUE
MÉGRET
HEAD OF
SWISSCOM
VENTURES
foster business development and establish collaborations with external
companies.
What is your view about the Swiss startup ecosystem and
how has it evolved?
I think that the ecosystem has evolved positively on the back of
world class research institutions and increasingly experienced entrepreneurs,
support professionals and investors. But we need to
be more ambitious and increase the amount of VC investment
(CHF1bn in 2017) to keep up with the rest of the world (USD
155bn). Ultimately, we should aim at catching up with best-in-class
innovation countries like Sweden (USD 1.8bn) or Israel (USD 4bn),
that have economies of similar size to Switzerland.
What is Swisscom Ventures’ role in this market
environment?
In the Swiss startup ecosystem, we are increasingly taking a lead
role for early-stage A-round investments in ICT companies as a
first institutional investor after business angels and other early
supporters.
Is there a concrete example where working with a
portfolio company has created direct value for Swisscom’s
customers?
A good example is KeyLemon, a Martigny-based company specialized
on biometric authentication. Based on their expertise we
co-developed a voice recognition feature for our TV platform to
innovate and differentiate from our competitors and provide additional
value to Swisscom’s residential customers. Today, you find
this feature in our TV offering as a voice-enabled remote control
that even understands Swiss German dialect. Earlier this year, Key-
Lemon was successfully sold to AMS.
How does Swisscom Ventures collaborate with operating
business units at Swisscom?
We introduce startups into the line and try to establish or develop
a relationship with Swisscom. We push external innovation topdown
and bottom-up: Top-down we work through Swisscom top
managers in our investment committee. Bottom-up we closely
collaborate with a network of Venture Associates in the line, that
SWISSCOM’S SILICON VALLEY OFFICE
SWISS STARTUP GUIDE 2018