Why Entrepreneurs Can Find Growing Potential in Europe’s Newest Tech Capital

Europe continues to punch above its weight in terms of world-class innovation thanks to a combination of tech talent, public funding and leading research institutions. 

For years, cities like Munich, Paris, and London have dominated the rankings of Europe’s tech capitals, based on the support and opportunities on offer for entrepreneurs and aspiring founders. 

However, what many haven’t yet recognized is that Zurich, more commonly known as a picturesque Alpine city with an economy predominantly built around financial services, has quietly and consistently been building an edge thanks to its burgeoning innovation ecosystem and rising startup activity across the country. 

According to Milja Vulin Petrovic, Head of Start-ups and Scale-ups at EY Switzerland, there was “a clear stabilization in the Swiss start-up ecosystem in 2025. Both the number of funding rounds and the capital invested have increased again. Particularly pleasing is the strong momentum in forward-looking areas such as AI and health.” 

Across Switzerland, 515 funding rounds for start-ups were recorded in 2025, with Swiss-startups increasing the amount of capital raised by 44% year on year. Zurich has played an incredible role in this overall performance. 

For entrepreneurs, Zurich is also an increasingly popular choice compared to more established tech cities, which are much more saturated with competition. Meanwhile, Zurich offers access to world-class research facilities, funding opportunities and an impressive deep tech scene. 

Below is a closer look at how Zurich has carved a new name for itself as a tech hub, and the opportunities entrepreneurs should have on their radar. 

An academic powerhouse

Today, Zurich is poised to lead across a number of fronts, including AI, fintech, robotics and deep tech, among others. 

However, Zurich’s newfound success as a tech hub for European entrepreneurs is the product of several converging areas of activity. 

For one, ETH Zurich is widely regarded as one of the world’s leading science and engineering universities, and the institution has acted as a primary driver of innovation across the city. With a concentration of academic excellence and interesting research projects pushing the frontiers of knowledge, the university has long helped to attract some of the most curious minds and brightest talent to the city. 

The academic strategy here also directly influences which disciplines will build a critical mass in the city. 

For example, in 2025, this will include the first graduates of ETH Zurich’s Master’s degree programme in quantum engineering. In turn, we expect the activity in quantum engineering startups to increase as more experts in the field are attracted to the city to study, work, and collaborate. 

Along with the University of Zurich, the academic institutions make a significant contribution to the flow of highly skilled graduates, researchers, and startup founders. 

Zurich also excels thanks to the collaborative nature of its academic institutions. The city has been successful in bridging the gap between research, public initiatives and the private sector. This close collaboration helps to ensure that innovation can cross the translation gap and move from the lab to commercial applications. 

This is further aided by specific organizations like the Albert Einstein School of Public Policy, established in 2025 to promote collaboration between academia and policymaking.

Funding, finance and legacy banks 

The next ingredient is access to funding and finance. Here, Zurich benefits from its historic strength as a global financial center. 

The presence of some of the world’s leading banks not only gives improved access to funding but also financial expertise. Although the amount of total funding may be less than heavyweights like Silicon Valley, Zurich is unmatched when it comes to the hands-on support that its investors and funders can offer founders. 

With deep expertise in financing ventures with a focus on long-term investment opportunities over short-term growth, startups here often prove to be more robust than most. This can be seen with high-value startups like Scandit, a computer vision firm that reached over US $1 billion valuation in 2022, and 21.co, the parent of 21Shares, a crypto investment ETP provider headquartered in Zurich, valued at around $2 billion.

Zurich is home to an estimated 150 venture capital funds across the city, acting as a magnet for an increasing number of entrepreneurs. 

While major European markets experienced flat or declining growth in 2025, Swiss startups attracted $3.56 billion in venture capital 

Further, Zurich is home to multinational technology companies that have established major research and development operations in the city. 

Organizations including Google, Microsoft, and IBM have invested heavily in Swiss research talent, creating a virtuous cycle that further strengthens the local ecosystem.

AI, deeptech and vertical growth

With world-class academic research, deep pools of funding and translation pathways to bridge the gap into industries, Zurich’s startups have access to a number of accelerators that fast-track growth and time to revenue. 

This helped the city gain an edge in a number of areas. The first and most important of these is AI, where researchers and startups are advancing applications across healthcare, finance, manufacturing, and enterprise software. 

Here, AI-focused startups attracted several of 2025’s largest early-stage rounds across a diverse range of applications. This includes $40 million in Series A funding raised by DeepJudge, a startup applying AI to legal practice workflows.

Meanwhile, Flexion Robotics and Gravis Robotics raised $49 million and $22 million, respectively for autonomous, AI-powered operations in live environments. 

Zurich’s growing edge in AI also promises to complement its more traditional industries, like insurance and finance. Building upon Switzerland’s historic strengths in banking and financial services, entrepreneurs are developing next-generation solutions in digital payments, wealth management, compliance technology, and financial infrastructure.

For example, Zurich Insurance Group Ltd. is a Swiss insurance company, headquartered in Zürich, and the country’s largest insurer. As of 2024, the group is the world’s 98th largest public company according to Forbes’ Global 2000s list. AI is helping the insurance group increase its foothold in international markets by allowing brokers and analysts to spend more time on clients and strategy. 

This illustrates the sustainability of Zurich’s tech ecosystem with new innovations supporting traditional industries and legacy companies funding the next generation of startups and ventures. 

Enhanced opportunity for Europe’s entrepreneurs 

As emerging technologies such as artificial intelligence, quantum computing, biotechnology, and advanced robotics reshape the global economy, Zurich is exceptionally well-positioned for continued growth. 

This not only creates a strong foundation for the next generation of founders and entrepreneurs in Zurich, but also helps strengthen Europe’s tech ecosystem as a whole by attracting funding and top talent to the continent.