Lockdown in Ticino: can startups survive the pandemic?

View of the test lab of Ticinsect
View of the test lab of Ticinsect

Il Litorale

14 April 2020

The Covid-19 pandemic has brought the global economy to a grinding halt. In Switzerland, like in many other countries, the Federal Council has taken fire-rapid decisions to help businesses by granting tens of billions of Swiss francs in emergency funds. But what about independent workers and startups? Dimitri Loringett, project manager at Il Litorale, investigates with a few startups in Ticino and with the CP Start-up of USI.

The region in Switzerland most affected by the Covid-19 outbreak is the Italian-speaking Canton of Ticino, where the local authorities decided to shut down all non-essential businesses in mid-March. Two measures have been put in place to help companies survive the lockdown: indemnities for reduced labour (Income compensation allowance), and government-backed loans (through zero-interest overdraft checking accounts, for amounts up to 10% of turnover). However, these measures are applicable to established business only. Independent workers, freelance professionals, etc. are currently excluded from any sort of government help. This is the case of early-stage businesses as well: startups, in fact, often do not have a company structure (incorporation) nor cash flows, as they are not yet productive and typically live off funding from private or public entities, the latter granted indirectly through coaching or covering R&D costs sustained by academic research institutions or (poly)technic schools. At Fondazione Agire, the Innovation Agency in Ticino, an initiative has been brought forward – together with the TiVenture and other partners – aiming at obtaining specific support measures from the cantonal government to help startups in this delicate phase. 

The CP Start-Up of USI seems to be coping reasonably well with the situation: “all things considered we manage to operate, in remote mode we can still have one-to-one interactions and work on our projects”, says Umberto Bondi, Startup Analyst & Coaching Manager at. “There are, however, certain difficulties stemming from  the overall uncertainty of the situation, which reflects on certain processes. For example, in the field of patenting and certification procedures: we are seeing that deadlines are not being extended, which is currently an issue for one of our early-stage startups. Furthermore, the ‘stand-by’ phase caused by the pandemic is leading investors, in turn, to halt all further negotiations until the crisis clears up. This means missing out on important milestones and hindering the overall development path of such projects”, Bondi points out. 

In the realm of early stage startups, which are seemingly the most at risk, we find Ticinsect, the Lugano-based company that produces animal feed ingredients by turning food waste into valuable proteins, which is currently incubated at the USI CP Start-up. According to CEO and founder Elisa Filippi, “the Covid-19 pandemic is making me work twice as much as before. The business opportunities and negotiations that we had until now have clearly slowed down, and to keep them going and to create new opportunities I have to keep operating at full speed”. Elisa runs a small lab where she can run feasibility tests for potential clients wanting to test the system. “It is essential to keep my lab fully operational in order to start new tests, one of which is currently underway and the prospects seem pretty good”, says Elisa, adding that “alongside the lab we are launching a crowdfunding campaign [through the wemakeitplatform] in the attempt to compensate the difficulty in continuing the negotiations with investors, which due to the crisis have been put on stand-by – like the financing round we were working on. Finally, to cover our small salaries, we have applied to obtain income compensation, which should help a little to stay afloat during this phase”, concludes Elisa. 

“We are helping our customers who have been forced to postpone or cancel their events. Entertainers are suffering important levels of income loss”, says Marco Alberti, CEO and co-founder of Stagend, the startup founded in 2010 and incubated at the USI CP Start-up in Lugano, which operates in the entertainment business. “To keep our liquidity flowing, we have requested and obtained help from the government, thanks to our status of incorporated firm, but this crisis comes in a phase of steady and very promising growth, with operations expanding mainly in Germany, which took much time to achieve”, Marco adds. “We’re overall optimistic, also because of the Innosuisse project we’re involved in that started in 2019 together with the Swiss AI Lab (IDSIA), which is helping us develop an innovative real-time matching and pricing system that should enable us to stay on track with our growth plans. We want to be ready to manage the boom of events we expect after the pandemic, because we all want to celebrate!”, concludes Marco.