UK spin-outs raise over £1bn in 201704/12/17Education
A new report on the funding of university spin-outs reveals that 2017 has been a record year for investment, with more than £1bn raised so far.
The report will be launched at the Innovation Forum Leaders Conference in Oxford, UK.
It analyses equity investment and public grants awarded to academic spin-outs between 1 January 2011 and 1 November 2017, with a focus on the investment trends of 2016.
The report finds that companies spinning out of UK universities located in the ‘Golden Triangle’ of Oxford, Cambridge and London are the most successful in raising capital.
Spinouts from Oxford University received the most equity investment in 2016, followed by Cambridge University and Imperial College London.
Cambridge is catching up with Oxford with data suggesting it will overtake Oxford by the end of this year.
While this is a positive sign for the many innovative spin-outs in the UK, it raises questions about the availability of funding as those companies develop.
Life sciences companies achieved the most deals in 2016, with the sub sectors of research tools/reagents, pharmaceuticals and clinical diagnostics all appearing in the top five when ranked by number of deals completed.
Other sectors that performed well include software and software as a service (SaaS).
Foreign investment contributed to 37% of investment by value in 2016 but only 15% of deals.
US-headquartered funds were the most significant source of capital outside the UK, being involved in deals worth 33% of the total invested in spin-outs in 2016.
Henry Whorwood, head of consultancy at Beauhurst, said: “The funding market for spin-outs is extremely buoyant at the moment. With more funds with a focus on knowledge intensive business coming online, further EIS incentives in the Budget, as well as support in the Industrial Strategy, we expect investment levels to continue to rise.”
The report was produced by Beauhurst, a data provider that specialises in providing insight on the UK’s start-ups and high-growth companies.
Its customers include some of the UK’s leading organisations in professional services, investment, higher education and government.