While much of the world has been in lockdown, one university has dominated headlines.
The superhuman effort of Oxford University to find a Covid-19-conquering vaccine has been followed worldwide. While its research abilities and academic expertise play a vital role, so does its link with AstraZeneca.
UK universities are becoming highly adept not only at partnering with businesses but also at using their extensive knowledge bases to found new companies. In the aftermath of the pandemic-enforced economic meltdown, universities may find themselves at the forefront of the race to rebuild the UK economy after the worst recession for 300 years.
Octopus Ventures’ Entrepreneurial Impact Ranking 2020 showed UK university spinouts are achieving record-breaking exit values. They noted that institutions received £61m from spinout exits, a 37% year-on-year increase. The report also revealed that highest exit values were achieved in artificial intelligence (AI), quantum computing, and life and medical sciences. Cambridge’s Centre for Science, Technology and Innovation Policy pointed to a quadrupling of the turnover of active spinouts, from £466m in 2002/3 to nearly £2bn by 2017.
And, as Salman Haqqi from money.co.uk noted: “Tech companies dominate the successful businesses that were started at university. That could be because of the accessibility the sector offers student entrepreneurs.”
UK institutions may still be playing catch-up with the USA – after all, Google was a spinout: now worth $1.3trn, its initial funding was a mere $100,000 – but there has been a change in recent years. The Thatcher government in the 1980s shifted towards universities satisfying future needs of employers and allowed universities to commercialise the results of their research. At the same time, the number of spinouts began to climb from single figures in the 1970s. The gentle upward curve of the graph turned into a vertical take-off which continued in the Major and Blair years. The Research Excellence Framework (REF), first carried out in 2014 and due again this year, surveys university research and, in many ways, reflects potential business opportunities.
So important is the link between research and business that the UK government has launched Aria – the Advanced Research and Invention Agency. Its £800m funding will last for four years and will fund ‘high risk, high reward’ scientific research, no doubt part of the pathway to repairing recent economic damage.
Here are 10 standout UK university spinouts
From: University of Newcastle
What do they do? Provide business management solutions
USP: Local startup to global success story
Founded in Newcastle upon Tyne in 1981, by David Goldman, Sage is now the UK’s second-largest technology company. Goldman sought to automate the print estimating and basic accounting processes in his own business and worked with a team of students from the university to develop software. The advent of desktop PCs in the mid-1980s fuelled Sage’s development. The growth of the company has been little short of phenomenal and it was listed on the London Stock Exchange in 1989. It is now one of just two technology stocks listed in the FTSE 100. It has grown through acquisitions and subscription services and has offices in 23 countries providing jobs to 13,000 people.
From: Imperial College, London
What do they do? Develop new materials to aid treatment of meniscus injuries
USP: Unique product with global potential
‘Knee’ and ‘injured’ often find themselves in the same sentence. These injuries can lead to years of debilitating pain, causing osteoarthritis and the need for joint replacement. Much of the pain can be down to damage to the meniscus and Orthonika, along with its development partner Sierra MedTech, aims to develop and commercialise a novel, anatomical total meniscus replacement. The implant is in development and is at the pre-clinical trial stage. The company was founded in 2014 and it presently has a very small workforce, though the impact of its discovery could be massive. Treatment for meniscus injury is somewhat limited, so the international growth potential of the company is considerable.
From: Queen’s University, Belfast
What do they do? Produce highly sensitive digital cameras
USP: Leader in development and manufacture of high-performance scientific digital cameras for academic, industrial and government applications
The company was set up in the late 1980s by founders Dr Hugh Cormican and Dr Donal Denvir. Around 20 years after the business was founded, Cormican, then managing director, told New Scientist magazine he “went into physics with the idea I wanted to be in business”. Denvir and Cormican were researching lasers and used their physics knowledge to develop a highly sensitive digital camera which can be used to photograph everything from faint galaxies to individual cells of living tissue. It was listed on the Alternative Investment Market of the London Stock Exchange in December 2004 and, in December 2013, was purchased by Oxford Instruments for £176m. It employs more than 400 people worldwide with operations not only in Belfast but also Japan, China, Switzerland and the US.
From: University of Leeds
What do they do? Develop software and hardware to assist the overall performance of transportation companies
USP: The provision of a critical resource in transport planning.
Working in the transportation sector, some of the most visible products developed by the company include improvements to rail travellers’ experience, such as smart ticketing and automated delay repay. Established in 2004, the company now has around 450 employees across the UK and Ireland. It is quoted on the FTSE AIM index and, following its IPO in 2007, it has made 14 acquisitions. Tracsis products are used widely to improve customer service through better operational efficiency, cost reductions and reducing risks to improve safety. Company products also assist in the large infrastructure decisions, which must be taken as well as the improvement of asset performance and the reduction of maintenance interventions.
From: University of Bristol
What do they do? Develop new applications to assist the treatment of diabetes
USP: Seeking groundbreaking treatment for patients
Founded in 2014, the company designed synthetic glucose-binding molecules that react and adapt to glucose levels in the blood, thus preventing dangerously low blood-sugar levels. Based on research by Anthony Davis, professor of supramolecular chemistry, and PhD student Harry Destecroix – who became the company’s first chief executive – the pair co-founded the enterprise with chief financial officer Tom Smart. Ziylo was acquired by Danish pharmaceutical giant Novo Nordisk for £623m, leading to the University of Bristol gaining the Global University Venturing award of Exit of the Year 2019. The deal saw the formation of a new spinout called Carbometrics, which has employed Ziylo’s team.
From: University of Cardiff
What do they do? Address the issues of fault currents in power supply
USP: Extending the capacity of the power grid
Founded in 2012, the business is based on groundbreaking research by Dr Jeremy Hall at the Wolfson Centre for Magnetics. The aim was to develop fault limiting technologies in order to extend the fault-carrying capacity of an existing power grid. The research phase was completed in 2013 with funding from a combination of Cardiff University, venture capital and UK government support. That was followed with an Energy Entrepreneurs Fund grant from the Department of Energy and Climate Change to accelerate development of a full-scale prototype. Completed in 2016, the prototype successfully passed a series of short-circuit fault tests. Eriez Manufacturing became the majority shareholder in the company in May 2019 and, following a rigorous re-engineering programme, FaultCurrent’s new product became commercially available. The company now seeks partnerships with power suppliers internationally to tackle the global issue of fault currents.
From: University of Oxford
What do they do? Produce video games
USP: Global developer of games that ‘wow’ people
With first seed funding awarded by Oxford University in September 2001, the company was incorporated by Torsten Reil the following month. The video game development operation has offices in London, Birmingham and Brighton as well as a business office in San Francisco. With the tagline ‘We make games that wow people’ they released their first title, Backbreaker Football, for the iPhone in 2009. Other titles include NFL Rivals, My Horse, Icebreaker, Dawn of Titans and Clumsy Ninja along with their highest grossing and award-winning game CSR Racing, which appeared in 2012. The same year, they acquired Brighton-based developer Boss Alien. NaturalMotion was, in turn, acquired by Zynga in February 2014 for $527m. In August 2018, the company signed a multi-year licencing agreement with Disney to develop new Star Wars games.
From: University of the West of England
What do they do? Student housing
USP: Sole student accommodation provider holding a 5* accredited rating from the British Safety Council
Drive through any one of 27 cities across the UK and there’ll be at least one building declaring it is part of the Unite Students empire. In the last year, they have also absorbed rival Liberty Living, following on from their acquisition of UniLodge in 2001. Founded in 1991 and opening their pioneering first venture in Bristol in 1992 they now accommodate 76,000 students. It is listed in the FTSE250 and employs nearly 2,000 people. Research carried out by Nicholas Porter at the University of the West of England, demonstrated an early recognition of the increasing demand for quality student accommodation.
From: University of Strathclyde
What do they do? Assist people suffering from dementia
USP: The app is now the fastest-growing assistance platform for people with dementia
Strathclyde graduate Rogelio Arellano, together with his University of Glasgow colleagues Susanne Mitschke, Gabriella Matic and Patrick Renner, created the MindMate app. Development of the app was based on Arellano’s experience of caring for his grandfather, who had Alzheimer’s disease. His colleagues had been volunteering in care centres. The mobile- and tablet-based app aims to help people stricken with dementia to reduce the risk of cognitive decline.
Brain games on the app are combined with advice on healthy nutrition, regular exercise and social interaction. Their idea won the Young Innovators’ Challenge in 2015 and the £5,000 prize kickstarted MindMate.
In 2016, the company became the first Scottish start-up to join the Techstars Summer Accelerator Program in New York. Two years later, the company secured funding worth $2m from US investors.
From: University of Sheffield
What do they do? Data analysis for immediate action
USP: Using data to develop solutions
The company is a spin-out from the university’s department of computer science. Created in 2007 by academics and researchers of the Natural Language Processing and Organisations, Information and Knowledge Group, the aim was to commercialise research-based technology. The company researches, collects and analyses data in real time so it may be acted upon immediately. The company includes multi-million euro-funded research projects in collaboration with a range of companies such as WeSenseIt, a company encouraging water managers and the public to become engaged in water management. They’ve also been involved with the Glastonbury Festival, analysing social media comments to pinpoint and respond to any problems. A secondary spin-out has emerged from K-Now. The Floow specialises in data collection and storage, as well as management and enhancement of companies with which it becomes involved.
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