1、Equity investmentspinouts2024into ContentsTop industries for investment06.Top universities by equity deals09.Top investors08.Top equity deals07.Foreword01.Equity deals by number and stage05.Spinout investment03.Executive summary02.Exit by valuation13.Top universities by equity volume10.Investor nati

2、onality12.UK and foreigninvestment11.About the contributors16.Exit by location14.Methodology15.Equity investment into spinouts|2024|01.ForewordMoray WrightChief Executive Officer,ParkwalkFrom artificial intelligence(AI)to quantum computing and life sciences,we are now beyond the brink of scientific

3、breakthroughs that will radically transform the economy and society.Our collective conviction to seize the opportunities of novel innovation now matters more than ever.Spinouts will increasingly define much of the UKs economic standing in the world,our levels of productivity,advancements in public s

4、ervices and the innovation that can help curb climate change.The case for uncovering,nurturing and backing spinouts could not be stronger.Encouragingly,this report reveals that the green shoots of an investment recovery in spinouts has taken root after challenging times in 2023.Recent years have und

5、oubtedly been dominated by sizeable political shifts at home and abroad,widespread macro-economic volatility and the growing cost of capital.The impact:total equity investment in UK spinouts has been falling since the record high of 2.73b in 2021.It was down to 2.38b in 2022 and a concerning low of

6、1.75b in 2023.However,spinouts attracted 1bn in the first six months of 2024 alone,and if that trajectory holds,total investment will now surpass 2023 levels.Where there is cause for concern is in first time equity deals as they continue trending downwards.67 deals were completed in 2023,almost half

7、 the number from 2021 when 120 were done.In the immediate future,there is the threat of lost opportunities for the UK with transformative ideas failing to leave the lab.But the foundations are in place.Taking a longer-term view,the UK has successfully established a culture of commercialisation acros

8、s its university base.In around a decade,yearly funding has almost quadrupled to reach an expected 2.3b in 2024,up from just 514m back in 2014.Yet,this means we need an urgent resurgence in investor appetite at the earliest stages to create the pipeline of companies that go on to scale.Across all st

9、ages of investment,the total number of equity deals has encouragingly remained stable from 2020 to H1 2024.This equates to a resilient funding ecosystem in Britain that can support research-intensive companies through to later stages.We also now see UK university spinouts attracting the allure of gl

10、obal investors.A decade ago,our research-intensive companies were almost exclusively funded by domestic investors.Fast forward to 2023 and 23%of equity deals represented a UK-foreign co-investment.Its vital that UK spinouts and investors are accessing larger pools of growth capital,whilst the Mansio

11、n House reforms take effect and unlock vast domestic sources of patient capital.There are also verticals the UK is clearly excelling in.Life Sciences,inclusive of seven related industries such as pharmaceuticals and biotechnology,accounted for 210 deals from H2 2023 to H1 2024.Over the same period,s

12、pinouts in artificial intelligence secured 53 deals.These are specialisms that the UK has a recognised competitive advantage internationally,and has the potential to generate major societal and economic gains from.In 2023,Parkwalk remained the UKs leading investor in spinouts,participating in 29 dea

13、ls across life sciences,AI,CleanTech and more these deals had a combined value of 304m.We also launched our third Enterprise Fund with Imperial College London,and successfully closed our 6thUniversity of Oxford Innovation Fund and 9thUniversity of Cambridge Enterprise Fund.Parkwalk also launched its

14、third Knowledge Intensive EIS Fund,supporting some of the countrys leading science-based businesses and deploying capital through attractive tax relief.We welcomed the Labour governments decision to extend the Enterprise Investment Scheme to 2035 and will continue investing in more spinouts to solve

15、 the challenges of today and tomorrow.Equity investment into spinouts|2024|02.Academic spinouts play a pivotal role in enhancing the UKs global competitiveness by bringing groundbreaking innovations to market.Equity investment is crucial in driving the growth and success of companies and reflects th

16、e confidence and interest in these ventures.The investment landscape for UK spinouts in 2023 has demonstrated both resilience and adaptability amidst a more challenging economic climate.Equity investment in spinouts fell to 2.34b,down from the pandemic-related peaks in 2021 and 2022.Despite this dec

17、line,the number of deals has remained consistent between 2020 and 2023,with between 420 and 426 deals occurring each year.This stability is encouraging,particularly when compared to the broader equity-backed sector,where deal numbers fell by over 10%in 2023.The first half of 2024 suggests a positive

18、 trajectory,with total investment already nearing 1.00b,on track to surpass the 2023 figure.However,the 15.3%decline in first-time equity deals highlights a potential bottleneck in early-stage fundinga critical component for nurturing the next wave of high-growth spinouts.Despite these challenges,ke

19、y sectors such as application software,AI,life sciences,and CleanTech continue to attract significant investment,underscoring the UKs strength in these cutting-edge industries.The global allure of the UKs spinout ecosystem has continued to strengthen,with increasing participation from foreign invest

20、ors since 2021.While domestic investment remains a cornerstone,the growing trend of co-investment between UK and international investors highlights the rising global interest in UK spinouts.The US remains a dominant player,with American funds frequently participating in key deals,alongside significa

21、nt contributions from investors in the Netherlands and France.These developments reaffirm the UKs commitment to ensuring that local spinouts not only thrive but lead the way in shaping the future of global innovation and delivering real-world impact.Executive summaryHenry WhorwoodManaging Director,R

22、esearch and Consultancy at Beauhurst“The investment landscape for UK spinouts in 2023 has demonstrated both resilience and adaptability amidst a more challenging economic climate.Spinout investment equity deals secured by spinouts(2014-2023)3,658205 14.6b995mequity deals securedby spinouts(H1 2024)e

23、quity investment value secured by spinouts(2014-2023)equity investment value secured by spinouts(H1 2024)Equity investment into spinouts|2024|04.Spinout investmentEquity investment in UK spinouts(2014-H1 2024)Spinouts attracted 1.75b of equity investment in 2023.This figure is markedly less compared

24、 to the pandemic-stimulus highs of 2.73b and 2.38b in 2021 and 2022,respectively.However,the consistent number of deals is encouraging,indicating that the decline in total investment does not equate to a failure in securing funding,even in a more challenging fundraising environment.Notably,spinouts

25、have shown greater resilience than the broader equity-backed sector,where the number of deals fell by more than 10%in 2023 compared to the previous year.With 1.00b,the H1 2024 figures are promising,putting the annual total on track to surpass that of 2023,while the number of deals is likely to remai

26、n consistent with recent years.Despite heightened investor caution over the past 18 months,capital remains accessible for companies with robust intellectual property at their core.2014201520162017201820192020202120222023H1 2024205360370389295293259420420426426877m2.38b986m2.73b1.53b1.53b514m1.75b1.2

27、2b1.11b1.00bAmount raisedNumber of dealsEquity investment into spinouts|2024|05.Equity deals by number and stageWhile the overall number of deals has remained stable in recent years,the decline in first-time deals secured by spinouts in 2023 is concerning.This could be the result of fewer investible

28、 spinouts at the earliest stages,or investors might be less inclined to support companies at this nascent phase-or perhaps both.These initial rounds of funding are crucial for early-stage development,they help form the pipeline of IP-rich growth companies.In terms of deal numbers,the H1 2024 figures

29、 suggest this trend will persist.Although,the total value raised so far is promising having neatly reached 2023 levels,due to several eight-figure deals.First-time equity deals in spinouts by year(2014-H1 2024)2014201520162017201820192020202120222023H1 2024186m133m107m158m115m122m112m85.0m85.2m50.6m

30、72.2m32791208586868790926766Amount raisedNumber of dealsEquity investment deals in spinouts by stage of evolution at deal date(2014-H1 2024)2014201520162017201820192020202120222023H1 202493169137821731401771431781441442151781206542187394311519453511547131158170111333141522111196332620661854SeedVentu

31、reGrowthEstablishedEquity investment into spinouts|2024|06.Top industries for investmentApplication software emerges as the frontrunner,with spinouts in this sector securing the highest number of equity deals(97),underscoring the strength of the UKs digital economy.The substantial activity in AI(53)

32、further highlights the sectors growing importance,driven by recent advancements and global enthusiasm for its potential.This dual focus on software and AI reflects a broader global trend,where AI integration is increasingly central to the software development landscape.The life sciences sector,with

33、seven related industries sitting under it including pharmaceuticals and biotechnology,accounted for a total of 210 equity deals.This reflects the distribution of the overall population of spinouts.CleanTech,with 51 equity deals,emphasises the sectors growing importance in the UKs shift toward sustai

34、nability.It is encouraging to see academic institutions driving innovation and creating valuable spinouts that contribute to this goal,aligning with the UKs commitment to achieving net-zero emissions.Notably,this includes a 52.7m round raised by Tokamak Energy in December 2023,a spinout from the Cul

35、ham Centre for Fusion Energy developing fusion-based energy technology.Top industries by number of equity deals in spinouts(H2 2023-H1 2024)Research tools/reagentsPharmaceuticalsAnalytics,insight,toolsArtificial IntelligenceClinical diagnosticsSoftware-as-a-service(SaaS)Medical devicesCleanTechMater

36、ials technologyGenomicsPrecision medicineWearablesNanotechnologyeHealth705335534669665790526037513197Application softwarePharmaceuticalsBiotechnologyMedical devices and instrumentsElectronics hardwareData provision and analysisArtificial IntelligenceClinical diagnosticsResearch tools and reagentsCle

37、anTechClinical researchSoftware-as-a-Service(SaaS)ManufacturingGenomicsEquity investment into spinouts|2024|07.Top equity dealsEquity deals in spinouts by investment value(2023)78.7mInstitution:University of Oxford Headquarters:ReadingIncorporation year:2017 Activity:Quantum computingOxford Quantum

38、Circuits 71.4mInstitution:University College London Headquarters:London Incorporation year:2017 Activity:AI-powered video creation63.6mInstitution:University of Manchester Headquarters:London Incorporation year:2020 Activity:Pharmaceutical53.9mInstitution:University College London Headquarters:Londo

39、n Incorportion year:2020 Activity:Stem cell technology52.7mInstitution:Culham Centre for Fusion Energy Headquarters:Milton Incorporation year:2009 Activity:Fusion energy48.0mInstitution:University of Cambridge Headquarters:Cambridge Incorporation year:2022 Activity:Pharmaceutical45.6mInstitution:Uni

40、versity of Oxford Headquarters:Oxford Incorporation year:2012 Activity:Medical imagingComplement TherapeuticsTenpoint TherapeuticsTokamak Energy PerspectumT-TherapeuticsWhile no spinout deals exceeded 100m in 2023,compared to two in 2022,companies in the life sciences,quantum,and AI industries raise

41、d significant amounts to support R&D and commercialisation.Oxford Quantum Circuits secured the largest single round,raising 78.7m in November 2023 from investors,including Oxford Science Enterprises and Japans SBI Investment.The University of Oxford spinout offers quantum computing as a service from

42、 its base in Oxford.The second largest deal was secured by Synthesia,which has developed software to create videos featuring custom AI avatars.In June 2023,the University College Londonspinout secured 71.4m from investors,including Accel,Google Ventures,and MMC Ventures.This funding is intended to f

43、urther develop Synthesias platform,aiming to enhance its speed and improve the range of expressions displayed by the avatars.Equity investment into spinouts|2024|07.SynthesiaEquity investment into spinouts|2024|08.Top investorsParkwalk Advisors remained the leading investor in 2023,participating in

44、the most equity deals(29)alongside Scottish Enterprise.Notably,Parkwalks deals include participation in a 21.5m round with AccelerComm alongside international investors such as Swisscom Ventures.AccelerComm,which develops semiconductor technology for wireless communication,has secured 30.3m in equit

45、y investment across five funding rounds since spinning out from the University of Southampton in 2017.Parkwalk,in partnership with its parent company,IP Group,consistently ranks at the top of the investor charts for spinouts,with a diverse portfolio spanning priority sectors like quantum,semiconduct

46、ors,and life sciences.Scottish Enterprise,Scotlands national economic development agency,was also the equal top investor in spinouts last year,participating in 29 deals.The agency focuses on supporting innovative businesses within Scotland,leading to significant investments in academic spinouts.A no

47、table deal in 2023 was its participation in a 34.5m investment in ENOUGH,a mycoprotein developer spun out from the University of Strathclyde.Mercia Ventures also emerged as a key investor in spinouts in 2023,participating in 24 deals.The firm provides early-stage and growth capital through multiple

48、funds,including the Mercia EIS fund,which targets critical sectors such as deeptech and CleanTech.2429161010111212888889929Parkwalk AdvisorsScottish EnterpriseMercia Asset Management PLCBritish Business BankCambridge EnterpriseCambridge AngelsFuture Planet CapitalIP GroupBGFSyndicateRoomOxford Scien

49、ce EnterprisesSFC CapitalPar EquityNorthern GritstoneForesight GroupDeepbridge CapitalTop investors in spinouts by number of equity deals(2023)Equity investment into spinouts|2024|09.Top universities by equity dealsTop academic institutions by number of equity deals secured by their spinouts(2023)45

50、286226151515131414171712University of OxfordUniversity of CambridgeImperial College LondonUniversity of BristolUniversity of SheffieldUniversity of EdinburghUniversity College London Royal College of ArtNewcastle UniversityUniversity of StrathclydeUniversity of SouthamptonUniversity of ExeterUnivers

51、ity of Manchester101011555977777University of LeedsCity UniversityUniversity of WarwickKings College London Queens University BelfastUniversity of NottinghamUniversity of GlasgowUniversity of BirminghamSwansea UniversityLoughborough UniversityUniversity of SurreyHeriot-Watt UniversityThe top three i

52、nstitutionsOxford,Cambridge,and Imperial College Londonmaintain their leading position in the ranking of spinout equity deals in 2023.However,spinouts from both Oxford and Cambridge secured fewer deals in 2023 compared to 2022.Meanwhile,third-place Imperial College London saw a modest increase,with

53、deals rising from 26 to 28.Regional analysis continues to highlight the dominance of the“golden triangle”,a global science,technology,and innovation cluster made up of London,Oxford,and Cambridge.In the Midlands,the University of Sheffield(17)emerged as a notable contender,securing a place in the to

54、p five for the first time this year.Scottish universities,particularly the University of Edinburgh(17)and the University of Strathclyde(14),also maintained a strong presence,reflecting a robust spinout ecosystem in Scotland.Equity investment into spinouts|2024|10.Spinouts from the University of Oxfo

55、rd and the University of Cambridge continued to lead in equity investment value in 2023.However,reflecting the broader contraction in the equity-backed ecosystem,Oxford saw its investment halve,while Cambridge experienced a 32.9%decline when compared to last year.University College London(UCL)made a

56、 significant leap,surpassing Imperial College London to claim third place.This surge was driven by UCL securing three of the top 10 equity deals in 2023,catapulting its total investment eightfold to 243m.A notable example is the 42.0m secured by Quantum Motion,backed by investors including Parkwalk

57、Advisors and Porsche Ventures.Outside the“golden triangle,”the University of Manchester ranked fifth,with its spinouts raising 95.3m.This impressive total is largely attributed to a major deal in April 2023,where Complement Therapeutics secured 63.6m to develop treatments for illnesses caused by dys

58、regulation of the complement system.Top universities by equity volumeTop academic institutions by equity volume secured by their spinouts(2023)248m243m406m139m55.5m48.5m95.3m59.4m54.9m52.7m72.2m51.6m39.1mUniversity of OxfordUniversity of CambridgeUniversity College London Imperial College LondonUniv

59、ersity of ManchesterKings College London University of BristolUniversity of StrathclydeUniversity of GlasgowCulham Centre for Fusion EnergyUniversity of WarwickUniversity of SouthamptonNewcastle UniversityUniversity of BirminghamUniversity of LeedsBabraham InstituteUniversity of SheffieldRoyal Colle

60、ge of ArtQueens University BelfastCardiff UniversityCranfield UniversityUniversity of ExeterUniversity of St AndrewsUniversity of East AngliaUniversity of EdinburghSwansea University35.0m25.3m30.6m20.8m25.0m22.9m17.5m12.3m12.4m11.0m10.1m10.1m9.72mEquity investment into spinouts|2024|11.UK and foreig

61、n investmentBetween 2014 and 2020,most equity deals involving UK spinouts were backed solely by domestic investors,while the proportion of foreign investor-only deals and UK-foreign co-investment deals remained relatively stable.This reliance on domestic funding sources highlighted the strong commit

62、ment of a diverse range of UK-based investors,including government agencies,university commercialisation arms,and institutional investors,in supporting the nations spinouts.Since 2021,however,the composition of investors in spinout fundraising rounds has shifted.While domestic investment remains dom

63、inant,the proportion of UK-foreign co-investment deals has increased.This reflects before growing international interestin UK spinouts and opportunities for“value-arbitrage”between the UK and other global deeptech hubs.The pronounced increase in foreign co-investment in 2021 and 2022 can be partly a

64、ttributed to central bank stimulus measures worldwide.These were introduced to mitigate the pandemics impact,which directed substantial capital into riskier asset classes such as venture capital.63.9%64.3%81.0%78.1%75.7%80.0%84.2%86.1%79.5%31.8%28.6%14.6%16.4%20.3%15.6%13.3%9.04%13.4%4.29%7.14%4.35%

65、5.48%4.05%4.39%2.42%4.82%7.09%2014201520162017201820192020202120222023H1 202463.4%22.6%14.0%66.7%22.9%10.4%UK investors onlyUK-foreign co-investmentForeign investors onlyUK and foreign investor participation by proportion of equity deals into spinout(2014-H1 2024)Equity investment into spinouts|2024

66、|12.Top nationalities of funds by number of equity deals participation into spinouts,excluding UK(2014-H1 2024)Over the past decade,UK academic spinouts have attracted foreign investment from funds based in 48 countries.Among these overseas investors,the US stands out,with the highest number of part

67、icipations in UK spinout equity deals,totalling 526.In 2023 alone,62 US funds were involved in 39 deals,five of which ranked among the top 10 largest deals by value that year.Dutch investors continue to hold the second position,with 62 participations,while French funds have shown the most significan

68、t increase,participating in 53 dealsup from 40 the previous year.Notably,this includes a round led by French investor Sofinnova Capital into T-Therapeutics in November 2023.The University of Cambridge spinout,which develops pharmaceutical treatments for autoimmune diseases and cancers,secured fundin

69、g to advance its R&D in T-cell receptor therapies for cancer.Among Asian investors,Hong Kongs Horizon Ventures has been the most active,participating in nine UK spinout deals.The deals include its most recent 5.50m round into Xampla,a University of Cambridge spinout that develops biomaterials from p

70、lants.The funding will support Xampla in furthering the development of new applications for its innovative biomaterials.Investor nationality 5266255534225352924201716161720United StatesNetherlandsGermanyFranceChinaSwitzerlandAustraliaJapanIrelandSingaporeHong KongDenmark South KoreaSpainBelgiumEquit

71、y investment into spinouts|2024|13.Exit by valuationSince 2014,UK academic spinouts have seen 204 exits,including 32 IPOs and 172 acquisitions.Among the top 15 exits,only three are outside the life sciences sector.One of these is Darktrace,which listed on the NASDAQ in April 2021 with a market capit

72、alisation of 1.72b.The University of Cambridge spinout specialises in cybersecurity software that uses AI to detect behavioural anomalies and respond to cyber threats in real time.Between its founding in 2013 and its IPO in 2021,Darktrace raised 173m across seven rounds of equity funding.Another non

73、-life sciences exit is Intelligent Energy,which went public in July 2014 on the London Stock Exchange with a market capitalisation of 639m.The University of Loughborough spinout develops low-carbon fuel cell systems for the automotive,consumer electronics,and stationary power sectors.Between its inc

74、orporation in 2004 and its listing in 2014,Intelligent Energy raised 137m via seven rounds of equity investment.The third company is NaturalMotion,a University of Oxford spinout that develops and publishes online social games and provides animation technology used by game developers and visual effec

75、ts companies.Between its founding in 2001 and its acquisition by Zynga in 2014,NaturalMotion raised 7.14m.Exits by spinout valuation(2014-H1 2024)2.37b1.72b588m498m356m806m639m950m529m476m623m320m772m581m3.38bGyroscope TherapeuticsMiroBioOxford Nanopore TechnologiesExscientiaDarktraceOrchard Therape

76、uticsImmunocoreAdaptimmuneIntelligent EnergyZiyloCircassiaAchilles TherapeuticsAutolusFreeline TherapeuticsNaturalMotionIPOAcquisitionEquity investment into spinouts|2024|14.Stock exchange by number of spinouts listed(2014-H1 2024)UK spinouts have demonstrated a strong preference for domestic listin

77、gs,with most opting to trade on the Alternative Investment Market(AIM)and the London Stock Exchange(LSE).This confidence in the UK market is evident from the 14 spinouts choosing AIM and five selecting the LSE.However,the allure of international markets is also apparent,with 11 spinouts choosing to

78、list on NASDAQ in the US,attracted by the potential for higher valuations,broader capital access,and increased visibility.Notably,this includes Orchard Therapeutics,which completed a 177m IPO on NASDAQ in October 2018.Since 2014,153 UK spinouts have been acquired by buyers from 20 different countrie

79、s.The US leads the way with 59 acquisitions,followed by the UK with 48.Within Europe,the UK is the clear frontrunner,with Germany ranking a distant second,accounting for just five acquisitions.Exit by locationTop nationalities of acquirers of UK spinouts by number of acquisitions(2014-H1 2024)Altern

80、ative Investment MarketNASDAQ Stock MarketLondon Stock ExchangeNEX Exchange141115United StatesUnited KingdomJapanGermanySwitzerlandCanadaAustraliaNetherlandsIsraelFranceChina48112344452259Equity investment into spinouts|2024|15.MethodologyEquity investmentScaleupsAccelerator attendancesMBOs/MBIsVent

81、ure debtAcademic spinoutsHigh-growth listsMajor grant recipientsHigh-growth tracking triggersBeauhurst tracks all spinouts deemed to have spun out on or after 1 January 2011.Spinning out from an academic institution is one of our eight triggers(outlined on the right of this page)that we believe sugg

82、est a company has high-growth potential.More detail on Beauhursts tracking triggers is available via our website.Companies that spun out of an academic institution prior to 1 January 2011 may still be included in this report if they met one of the other seven triggers after 1 January 2011 and then w

83、ere subsequently determined to be a spinout.Equity investmentTo be included in our analysis,any investment must be:Secured by an academic spinout(as defined previously)Some form of equity investment Secured by a non-listed UK company Issued between 1 January 2014 and 30 June 2024What is an academic

84、spinout?We define an academic spinout as a company that meets condition 1 and at least one condition out of 2-4:1.The company was set up to exploit intellectual property developed by a recognised UK university or research institution(This is broadly in line with the Higher Education Statistics Agenc

85、ys(HESA)definition of a spin-off).2.The institution owns IP that it has licensed to the company.3.The institution owns shares in the company.4.The institution has the right(via an options or warrants contract)to purchase shares in the company at a later date.Equity investment into spinouts|2024|16.C

86、ontact 4th Floor,Brixton House385 Coldharbour Lane London SW9 8GL+44(0)20 7062 Beauhurst is the ultimate source of UK private company data.Through our data platform,we provide data on every UK private companyfrom investments and hiring status to patents and trade dataidentifying hidden growth,innova

87、tion,risks and ESG signals across UK companies.Our Research and Consultancy team can provide powerful insights,thought leadership,and data-led reports.Please get in touch if you would like to talk about a project.Contact 3 Pancras SquareKings CrossLondonN1C 4AG +44(0)20 7759 2285 Parkwalk is the lar

88、gest growth EIS fund manager,backing world-changing technologies emerging from the UKs leading universities and research institutions.With 500m of assets under management,it has invested in over 160 companies across its Parkwalk Opportunities and Knowledge Intensive EIS Funds,as well as the award-wi

89、nning enterprise and innovation funds Parkwalk manages for the Universities of Cambridge,Oxford,Bristol and Imperial College.Parkwalk invests in businesses creating solutions to real-world challenges,with IP-protected innovations,across a range of sectors including life sciences,AI,quantum computing,advanced materials,genomics,cleantech,future of mobility,medtech and big data.About the contributors Beauhurst 2024Editor Henry WhorwoodProduction Dan Robinson,Advone Katsande,Blanca Valencia,Bila Turay,Harry Walker,Justin Tsui,Miraj MistryDesign Evangeline Luckhurst