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A enterprise capital group backed by Cambridge college has launched a brand new £100mn fund to spend money on start-ups within the area, bolstering the UK authorities’s plan for greater training establishments to drive extra financial progress.
The brand new alternatives fund from Cambridge Innovation Capital contains vital “anchor” funding from British Affected person Capital, a subsidiary of the government-owned British Enterprise Financial institution, and Aviva Traders.
It’s the group’s first fund for bets on so-called scale-ups, comparatively superior start-ups which have confirmed their enterprise fashions and need to develop quickly, whereas its different funds are targeted on investing in firms which are in earlier phases of growth.
Andrew Williamson, the fund’s managing associate, mentioned its objective was to search out “the subsequent DeepMind, the subsequent Arm, the subsequent AstraZeneca — I believe we’ve received a few of these in our portfolio and this fund will probably be scaling these up”.
CIC, which has greater than £600mn of belongings beneath administration, is backed by Cambridge college and has particular entry to offers coming from the upper training establishment. It specialises in investing in firms spun out from college analysis, notably in life sciences and “deep tech” — improvements primarily based on elementary scientific advances.
The brand new fund has already backed its first two firms — chip designer and producer Pragmatic Semiconductor and quantum group Riverlane, that are each primarily based in Cambridge:
The fundraising comes simply weeks after the UK authorities revived a strategic plan to construct up transport and housing between its prime two universities, Oxford and Cambridge. Science secretary Peter Kyle mentioned the federal government wished to double the financial output of the “Oxford-Cambridge Arc”.
Williamson, who additionally co-chaired a overview of the UK’s college spinouts, mentioned the brand new fund “aligns superbly” with the federal government’s plan. “What the federal government is doing appropriately is taking a look at the place are essentially the most impactful investments,” he mentioned.
Cambridge Innovation Capital is one of some VC teams searching for to again firms popping out of UK universities.
Different funds searching for to again firms popping out of UK universities embrace Oxford Science Enterprises, which was based in 2015; and Northern Gritstone, which is geared toward start-ups from Manchester, Leeds and Sheffield universities.
Northern Gritstone launched in 2021 and raised funds value over £300mn in 2023. The group is elevating funds from new and present traders with a objective of elevating £50mn in additional capital, in accordance with an individual aware of the matter. Northern Gritstone declined to remark.
CIC’s Williamson mentioned the brand new fund aimed to shut a financing hole for superior start-ups within the UK which have hassle discovering home backers.
“By the point you get to this ‘scale-up’ stage, 80 to 90 per cent of the capital is coming from abroad traders. We welcome the overseas funding however there’s room for home funds to take part.”