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Cambridge university start-up fund raises £75m ahead of IPO

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October 18-20, 2023 / Tucson, AZ
The annual summit for research institution gap fund and accelerator programs, including proof of concept programs, startup accelerators, and university venture funds

The Story

The university founded CIC in 2013 with an original £50m investment, which came from its own funds as well as outside investors including Lansdowne Partners, one of the largest hedge funds in London, and Arm Holdings, the technology group.

The £75m of cash raised ahead of an expected IPO was oversubscribed, said Victor Christou, CIC’s chief executive. Existing shareholders have been joined by new investors such as Woodford Investment Management, Winton Ventures and the Oman Investment fund.

CIC has invested £33m in 13 start-up companies, originating both from the university and from the wider Cambridge technology cluster, which Mr Christou called “one of the richest seams of scientific and technological innovation in the world.”

After the new funding round, CIC will have around £95m to invest over the next two or three years. Typically, it makes investments in the £2m-to-£5m range.

Cambridge university will remain the largest shareholder in CIC, owning about a third of the company.

As the university’s “preferred investor”, CIC works closely with Cambridge Enterprise, the university’s technology transfer arm, which offers co-investment opportunities and access to pre-emption rights over companies spun out of the university.

The company operates a so-called “evergreen fund” strategy, which provides long-term capital to support growth without being driven to seek an exit by selling shares in businesses prematurely after a fixed period.

The closest equivalents to CIC are Imperial Innovations and IP Group, both of them well-established public companies. Another similar company is the Wellcome Trust’s wholly-owned Syncona evergreen fund.

“Cambridge is well provided with seed capital funding and the university has a great record in getting businesses off the ground but it needed a better structure for sustained follow-on funding — which we can provide,” said Mr Christou.

“Our intention is to list the business in 12 to 18 months,” he said, “but of course that will depend on market conditions.”

Numis Securities acted as financial adviser, broker and bookrunner for the fundraising.

The 13 investments made so far by CIC are divided almost equally between healthcare and technology sectors. The £33m has also brought in about £70m from co-investors.

One investment has been made in Congenica, a spinout from the Wellcome Trust Sanger Institute, which develops computer programs to decode genetic diseases from DNA data.

Another has been made in Jukedeck, set up by a Cambridge music graduate to bring artificial intelligence to music composition — for example, creating backing tracks for computer games and videos. The latest investment, announced last month, is in Cambridge Medical Robotics, which is developing robots to carry out minimal access, keyhole surgery.

Source: Cambridge university start-up fund raises £75m ahead of IPO – FT.com

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