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$474M Fund Will Support Oxford University Spinouts | TechCrunch

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The Story

A new £300 million U.K. fund has been set up to support high tech startups looking to spin out of the University of Oxford. The fund is being raised by Oxford Sciences Innovation (OSI), a newly formed company that is working in partnership with Oxford University and its commercialization arm, Isis Innovation.

The two entities will work to establish new IP-driven businesses based on research conducted at Oxford University — providing investment capital and as well as advice to budding startups, they said today.

OSI has been contractually established as the University’s preferred capital provision partner for spinout companies based on research from the Mathematical, Physical, Life Sciences and Medical Sciences divisions. It noted that Oxford University’s science divisions have an annual research budget of more than £400 million.

OSI… will be one of the largest investment funds dedicated to a single University’s research in the world

OSI is in the process of raising the fund, with £210 million committed at this point by six key investors keen to invest in promising science and tech research at an early stage — namely: Invesco Asset Management Limited, IP Group plc, Lansdowne Partners (UK) LLP, Oxford University Endowment Fund, the Wellcome Trust and Woodford Investment Management LLP.

Back in 2013, Cambridge University and the city’s high tech cluster got a £50 million fund of their own, called Cambridge Innovation Capital. Lead investors in that fund — Invesco Perpetual and Lansdowne Partners — are also backing this Oxford-focused fund. Both are also investors in a similar spin-out fund affiliated with London’s Imperial University, Imperial Innovations.

Interestingly, of the three university-focused funds, the Oxford fund is the only one that has a sole focus on its named university spinouts. The CIC also invests in startups coming out of the city’s high tech cluster, and the Imperial fund also invests in life science and tech companies spinning out from Oxford and Cambridge universities, and University College London.

OSI will be chaired by David Norwood, founder of IP Group, the intellectual property business behind the commercialization of university life sciences spinout, Oxford Nanopore.

Since 2000, Isis has established more than 100 spinout companies based on tech developed by Oxford University researchers — including eight in the last year. Spinouts valued in excess of £200m include Oxford Nanopore Technologies and games and animation company NaturalMotion. Others include the likes of Velocys, Oxford Immunotec and Fuel3D.

Update: A spokesman for OSI has responded to a few follow up questions from TechCrunch about the new fund.

TC: Can you tell me how much OSI will be investing typically per spin-out/startup?

A: This is not something that will be set in any way. OSI will act as the preferred partner for the provision of capital, but the level of investment made in specific spinouts will be on a strictly case by case basis.

Further, a huge part of OSI’s role will be not just to establish and develop companies itself, but also to support the growth of the wider entrepreneurial ecosystem surrounding Oxford University. We will seek to provide support wherever we see potential for companies arising out of the University’s scientific research, whether or not OSI is the main investor.

TC: When will the first investments be made?

A: Given that Isis Innovation, the University’s technology transfer office, files, on average, more than one patent application every week, sourcing innovation will not be difficult. Isis has for several years managed the spinout of new science and technology companies based on research conducted at the University, and that will continue to be the case.

Setting a specific timetable for individual investments is not possible at this stage. The first priority, though, will be building a first-class team to identify and manage those investments.

TC: And how many investments per year are likely?

A: Again this is not something we can commit to at this stage, as it will be utterly contingent on the research taking place.

TC: Why is it necessary to establish a new company for Oxford-based investments, given the university already has a technology commercialization subsidiary?

A: Isis has for several years managed the spinout of new science and technology companies based on research conducted at the University, and that will continue to be the case.

via $474M Fund Will Support Oxford University Spinouts | TechCrunch.

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