Challenge Fund marks ten years

The University of Cambridge Challenge Fund, which supports new businesses arising from University research, is marking its tenth anniversary this year.

The Challenge Fund was established as part of a national government initiative to fund university innovation. Over the past decade, the Cambridge Challenge Fund has made 34 investments and supported the development of 23 companies originating from University research. Eight of these investments have been realised, returning £1.9 million to the Fund for re-investment in new companies.

The Challenge Fund has supported a wide range of University spin-outs, from Psynova Neurotech, which has developed the first blood test for schizophrenia, to Camfridge, which has developed a highly efficient refrigeration technique. Two of the companies supported by the Challenge Fund have gone on to produce spin-out companies of their own.

Professor Florin Udrea of the Department of Engineering was one of the first to receive funding from the Challenge Fund when he co-founded Cambridge Semiconductor Ltd (CamSemi), a fabless semiconductor company which designs and manufactures energy-efficient power conversion products. The company has gone on to raise close to £30 million in follow-on funding.

Professor Udrea said: “The funding we received from the Challenge Fund was instrumental to CamSemi in our early days. It is a critical resource for early-stage University companies, and continues to provide support to Cambridge researchers.”

Bill Matthews, who played a key role in the establishment of a dedicated seed funds team at Cambridge, said: “The Challenge Fund has played a pivotal role in establishing and supporting the entrepreneurial culture of the University. Challenge Fund investment puts University spin-outs in a position to attract the right people and funding.”

The University Challenge Fund programme was established in 1999 with funding from the Department of Trade and Industry (now the Department of Business, Innovation and Skills), the Wellcome Trust and the Gatsby Foundation. The University, in collaboration with the Babraham Institute, successfully applied for funding to establish a £4 million seed fund in 2000.

Companies receiving support from the Cambridge Challenge Fund have raised over £100 million in follow on investment and £17 million in grant funding, leveraging the original Fund investment 33x, greater than any other fund in the Challenge Fund programme. Cambridge Challenge Fund companies employ over 200 people.

The Challenge Fund is one of three early stage ‘evergreen’ seed funds managed by Cambridge Enterprise, the University’s commercialisation group. The University Venture Fund was established in 1995 with University capital, and the University Discovery Fund was established in 2008 as part of the 800th Anniversary Campaign. In total, portfolio companies from all three funds have attracted over £600 million in grants and follow-on funding.

Photo credit: Clare Bridge, Cambridge by Nige Brown via Flickr