A new analysis of equity investments in university spinouts shows a positive picture of buoyant investment, with UCL on a par with Cambridge University and outperforming a raft of UK universities in volume of equity raised by its spinout businesses.  

In the first six months of 2024 university spinouts nationwide secured over £1bn in funding. A continuation of this trend will see investment for this year surpass 2023 levels, signalling a resurgence for the UK’s most innovative companies. 

The second largest deal cited in the report was secured by Synthesia, which has developed software to create videos featuring custom AI avatars. In June 2023, the London based startup co-founded by a UCL academic secured £71.4m from investors, including Accel, Google Ventures, and MMC Ventures to further develop Synthesia’s platform.  

Fourth in the top ten equity deals last year was UCL spinout Tenpoint Therapeutics with £53.9m. Tenpoint is pioneering the use of stem cell technology in the treatment of macular degeneration – a common degenerative eye disease. 

UK spinouts are also thriving in several critical sectors such as artificial intelligence, life sciences, and cleantech – all particularly strong areas of UCL academic research. UK-wide, Life Sciences (including related industries such as Pharmaceuticals and Biotechnology) accounted for 210 deals from the first six months of 2023 to mid-2024.  

Over the same period, spinouts in artificial intelligence secured 53 deals, and cleantech, 51. 

Whilst equity investment in university spinouts had fallen from the record high of £2.73bn in 2021, university spinouts attracted investment of £1.75bn in 2023, surpassing pre-pandemic levels of £1.53bn in 2020. The number of deals for spinouts has remained stable between 2020 and 2023, with an average of 423 deals each year. 

“The report does suggest that a culture of commercialisation with successful Technology Transfer Offices (TTOs) has been established across the UK’s university base. Annual spinout investment has quadrupled in 10 years, rising from £514m (2014) to an estimated £2.3bn in 2024,” says Parkwalk. 

The sector is not without its challenges. The report shows a 15% decline in first-time equity deals for spinouts, falling to 67 in 2023 from 86 in 2022. First time funding has been trending down – highlighting a potential bottleneck in early-stage funding.  

This highlights the important role of Proof of Concept funding, which supports academics to improve the ‘technology readiness’ of their research, getting innovations to a point where market potential is clear so that they can attract investor interest.  

UCLB’s own Proof of Concept fund continues to award this kind of financial support and has helped a range of spinouts to success, including now-successful major businesses such as Autolus Therapeutics, Senceive and Satalia.  

Further information: 

Equity investment into spinouts 2024