More than 90% of the UK’s 24 Russell Group universities — a self-selected group of research-intensive institutions, considered to be the best in the country by many — now have a university-affiliated venture fund focused on spinouts after a number of new investment vehicles emerged in 2024.
There are only two which don’t: King’s College London and the London School of Economics, which tells Sifted its “innovation projects tend to have a social impact focus and not to be IP rich, [so] they’re largely unsuitable for traditional VC investment.”
There’s been more attention on university spinouts in Europe in recent years, and the rise of investment vehicles to back them shows that many investors are convinced that the next unicorns in Europe will be born in research institutions.
In the UK, investment into spinouts has grown 240% in 10 years, up from £514m across 259 deals in 2014 to £1.75bn across 420 deals in 2023, according to a 2024 report from spinout investor Parkwalk and data platform Beauhurst, which also had investment on track to top £2bn last year.
University-affiliated investment vehicles come in two forms: those focused on a single institution and those which are set up to back spinouts from several universities regionally. Sifted has rounded up both kinds below (where ‘companies in portfolio’ aren’t listed, the fund hasn’t started investing yet). If there’s anyone missing, get in touch.
The UK’s university-affiliated spinout venture funds
Fund: Oxford Science Enterprises
Launched: 2015
Assets under management: £850m+
Companies in portfolio: 75
Oxford Science Enterprises invests in deeptech, healthtech and life sciences companies at pre-seed and seed stage that come out of the University of Oxford, with a close focus on its science departments.
Companies it’s backed include Fluorok, which has developed a chemical toolbox to synthesise a range of molecules and was one of the Oxford-based startups to watch when Sifted polled VCs last year, and PQShield, which develops quantum-ready hardware, software and communications technology.
Fund: Cambridge Innovation Capital
Launched: 2013
Assets under management: £600m
Companies in portfolio: 30
Cambridge Innovation Capital (CIC) was one of the first university-affiliated venture funds to be set up in the UK back in 2013, and backs spinouts coming out of the University of Cambridge at seed and Series A.
Its portfolio includes semiconductor companies Cambridge GaN Devices and Pragmatic, which were picked out as companies to watch in Cambridge when Sifted asked investors in October last year.
CIC has also seen a number of exits, including Gyroscope Therapeutics, which is developing gene therapies for eye diseases. It was bought by pharma company Novartis in 2021, in a deal worth an initial $800m, with the potential of additional milestone payments of up to $700m.
Fund: Northern Gritstone
Launched: 2021
Assets under management: £312m
Companies in portfolio: 31
Northern Gritstone was set up to back spinouts from the universities of Leeds, Manchester and Sheffield. It announced a first close of £215m in 2022 and a final close of £312m in 2023.
Its portfolio includes Imperagen, a life sciences company working on tech to speed up the time it takes to design, optimise and validate enzymes for molecular drug discovery, and Opteran, a Sheffield-based spinout which has re-engineered insect brains for use in autonomous machines.
Fund: SetSquared Partnership and QantX
Launched: 2024
Assets under management: Targeting £300m
The Setsquared Partnership universities of Bath, Bristol, Cardiff, Exeter, Southampton and Surrey announced late last year that they were partnering with investor QantX to launch a £300m investment vehicle to back spinouts coming out of those universities. It hasn’t closed anything yet.
Those six universities have a research portfolio worth more than £600m, and have produced more than 230 spinouts.
Setsquared was listed as one of the top startup hubs in Europe in 2024 in a ranking by the Financial Times, Sifted and data provider Statista.
Fund: Midlands Mindforge
Launched: 2023
Assets under management: Targeting up to £250m
Midlands Mindforge followed swiftly on the heels of Northern Gritstone. It’s aiming to raise money to invest in spinouts from the Russell Group universities Birmingham, Nottingham and Warwick, as well as the universities of Aston, Cranfield, Keele, Leicester and Loughborough. It has a target of up to £250m.
Fund: UCL Tech Fund
Launched: 2016
Assets under management: £120m
Companies in portfolio: 24
UCL Tech Fund was launched in 2016 to back physical and life sciences spinouts coming out of the London institution. The fund is managed by London-based VC Albion together with UCL Business — the university’s tech transfer office.
Its portfolio includes AstronauTx, which is developing a series of small molecule therapies to treat neurodegenerative diseases, and Oriole Networks, which has developed a technique to train AI faster than current methods by using photonics.
Fund: Gaia Sciences Innovation
Launched: 2023
Assets under management: £80m (first close) with a target of £100m and hard cap of £150m
Companies in portfolio: 1
Gaia Sciences Innovation is a partnership between fund manager Greensphere Capital and the University of York, Royal Botanical Gardens Kew, the Zoological Society of London, the UK Centre for Ecology and Hydrology and the Anglia Innovation Partnership. Its focus is on investing in spinouts from those institutions that help fight the climate crisis and biodiversity loss.
Fund: Old College Capital
Launched: 2011
Assets under management: £70m+
Companies in portfolio: 60
Old College Capital (OCC) is the venture fund of the University of Edinburgh. Its portfolio includes MiAlgae, a company which is producing microalgae using by-products from whisky distillation.
Fund: Unnamed fund targeting universities in the north east of England
Launched: 2024
Assets under management: Targeting £22.5m (£12.5m committed by the five universities)
Five universities in the north east of England (including the Russell Group’s Newcastle and Durham) are raising a £22.5m fund to invest in their spinouts. It’ll invest over five years in at least 30 companies, Global University Venturing reported.
Fund: Imperial College London Enterprise Fund (managed by Parkwalk Advisors)
Launched: 2020
Assets under management: Fund one (£2m); fund two (£1m); fund three (£1.1m)
Companies in portfolio: 12
Imperial College launched its Enterprise Fund in 2020 and has 12 companies in its portfolio across three funds. The funds are managed by spinout investor Parkwalk Advisors, which also manages funds for the universities of Cambridge, Oxford and Bristol.
Fund: University of Liverpool Enterprise Investment Fund
Launched: 2018
Assets under management: Fund has £1.5m available to invest per year.
Companies in portfolio: 20
The University of Liverpool Enterprise Investment Fund provides equity and proof-of-concept funding to spinouts coming out of the institution. It writes tickets of up to £150k into companies, and has invested a total of £5.6m since 2018.
Fund: Qubis Innovation Fund
Launched: 2021
Assets under management: £1m
Companies in portfolio: 11
Qubis Innovation Fund was launched in 2021 by Qubis, the commercialisation arm of Queen’s University, Belfast, and Sapphire Capital Partners, a Belfast-based investment manager, to invest in spinouts coming out of Queen’s University.
The fund also considers investments into spinouts from partner universities participating in the Queen’s-led NxNW ICURe Programme, which aims to explore the commercial application of UK research. Those universities include Ulster University, University of Edinburgh, University of Liverpool, University of Sheffield, University of Manchester and the University of Leeds.
Fund: Queen Mary University of London Investment Fund (QMIF)
Launched: 2022
Assets under management: QMIF declined to confirm assets under management with Sifted.
Companies in portfolio: Six
QMIF writes tickets into early-stage spinouts from Queen Mary University of London after the proof-of-concept stage, and has invested £1.1m to date. Queen Mary creates three spinouts per year, it tells Sifted, with plans to increase that number.
Fund: GU Holdings:
Launched: 1997
Assets under management: The University of Glasgow didn’t respond to Sifted’s request to confirm by press time.
GU Holdings is the seed fund from which the University of Glasgow invests into its spinouts. Its portfolio includes Neuranics, a company which develops sensors integrated with semiconductors which can detect tiny magnetic signals from organs in the body.
Read the orginal article: https://sifted.eu/articles/russell-group-universities-spinout-venture-funds/
