The SECO Startup Fund (SSF), managed by Switzerland’s State Secretariat for Economic Affairs (SECO), has relaunched with CHF 5 million (US$6.28 million) to address financing gaps for businesses in emerging markets.

The fund, now overseen by iGravity and Seedstars, targets entrepreneurs in Asia, Africa, Latin America, and Eastern Europe.

Established in 1997, the SSF aims to promote inclusive and climate-smart economic growth in partner countries.

With a revised strategy, it offers senior secured loans between CHF 300,000 (US$336,000) and CHF 1 million (US$1.12 million) to post-revenue businesses that often lack access to traditional financing sources.

The fund prioritizes companies connected to Switzerland through shareholders, suppliers, or partnerships.

Since its inception, the SSF has disbursed CHF 44 million (US$55.2 million) to over 120 companies.

Supported ventures include sustainable coffee production in Vietnam, precision manufacturing in China, waste management initiatives in Indonesia, and sustainable furniture production in Mongolia.

🔗 Source: SECO

🧠 Food for thought

1️⃣ Impact investing addresses critical financing gap for growth-stage enterprises

The SECO Startup Fund directly addresses a widespread challenge documented across emerging markets: limited access to growth capital for established but scaling businesses.

Research shows that over 50% of startups in emerging markets fail due to liquidity issues and lack of access to short-term credit, despite having viable business models 1.

The financing gap is particularly acute for post-revenue businesses that have proven concepts but remain too small or risky for traditional lenders, precisely the segment SSF targets with its CHF 300,000-1,000,000 loans.

This pattern exists across regions, with underdeveloped banking systems and high interest rates limiting growth capital access for enterprises that could otherwise drive job creation and economic development 2.

SSF’s approach of providing patient capital with 2-5 year terms aligns with research showing entrepreneurs often resort to informal funding sources when formal financial institutions favor established businesses over growing ventures 1.

2️⃣ Switzerland leverages economic diplomacy through targeted impact financing