Report shows most successful UK universities for spinouts

Report shows most successful UK universities for spinouts

Business news |
By Nick Flaherty

A university spinout report shows which UK universities top the rankings for turning innovation into commercial success.

The study by Intellectual property service and R&D tax credit specialists GovGrant analysed data for companies founded between 1998 and 2018.

The most successful electronics startup on the list is fuel cell developer Ceres Power, a spinout of Imperial College London. All the rest are in pharmaceuticals or healthcore.

Oxford is the leading university in the list, accounting for almost 16% of the UK’s university spinouts with a total value of £6.4 billion from £2.9bn of investment. Imperial is next on the list in terms of value (£2.7 billion) even though its startups make up less than 9% of the startup landscape.

The study analysed 958 spinouts with £19.20 billion of capital invested, 4,495 deals and 1,907 investors. These have been created off the back of university research and IP, and developed and commercialised by the institution’s enterprise team. Usually, the management team will be former or current researchers, sometimes even PhD students. The university, or one of its connected venture funds, will provide the company with startup capital, and will usually act as a significant shareholder in the company from the start.

Startups that originate from universities, on the other hand, don’t use university intellectual property. They are founded by university employees or graduates who have been inspired by academic research.

Then there are student-owned companies and not-for-profit organisations that have no direct links to university research, but may have connections to university spinouts or startups.

The University of Strathclyde has worked its way into the top 10, having come just outside it prior to 2008. The real surprise with the latest figures is that the Royal College of Art comes in at number eight on the list highlighting how more innovation at universities is happening in new areas and isn’t just the preserve of traditionally scientific institutions.

Top spot goes to Oxford Nanopore, a technology company (although it has healthcare applications) founded at the University of Oxford in 2005 and produces devices that analyse molecular structure.. Next comes the first healthcare entry Exscientia, an artificial intelligence-driven drug discovery company, which was founded in 2012 at the University of Dundee.

Oxford claims five spinouts in the top 10, while the first entry from Cambridge, Inivata, is down in 17th position. Collectively, companies from the University of Oxford in the top 10 are worth £4.33 billion, over 50% of the top 10’s total value.

The University of Bristol topped the list for the return on capital with an overall return of 285%.

“It is great to see the recognition this report gives to Bristol’s entrepreneurial and research talent, from biotech to data science and quantum technologies,” said Marty Reid, Director of SETsquared Bristol, the University’s startup incubator.

“This success hasn’t come overnight and so many teams across the University are instrumental to providing tailored support to ensure our ventures have the best chance to scale,” he said. “What’s exciting is that from the inside this only feels like the beginning, with big plans currently underway to deliver a significant step change in innovation and enterprise for both the University and the wider city-region innovation ecosystem.”

Healthcare dominates the scene, accounting for 61% (£7.4 billion) of all capital raised and 47% (446) of the spinout cohort. IT comes second with 18% (£2.2 billion) of capital raised and 25% (242) of the spinouts. Just over half (£6.1 billion/51%) of all capital raised went to 266 (28% of the total) spinouts in pharmaceuticals and biotechnology. More healthcare spinouts raised capital (£1.0 billion/8.7%) in the field of devices and supplies, a group of 132 (13.8%) companies

There was slightly more raised by computer hardware spinouts (£1.1 billion/9.5%), who comprise only 50 (5.2%) companies.

However this may change with the emerging quantum technology spinouts from several universities now raising significant levels of funding.

The report is here.

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