Universities, founders and investors get behind Government’s spinout boom ambition

They will come together at the One Year, One Mission event at the Tate Modern to mark the anniversary of the Independent Review of Spinouts.

The Government has repeatedly – in its Manifesto, Industrial Strategy, Budget and most recently the Chancellor’s Mansion House speech – committed to creating more spinouts, companies formed from university breakthroughs.

UK Universities create globally competitive companies, which raised £1.66bn in equity funding in 2023 (9.5% of equity raised by UK companies).

These include companies formed around innovations to tackle climate change, life-changing new treatments for diseases, and game-changing AI breakthroughs.

In 2023 the Independent Review of Spinouts looked at the most successful spin-out ecosystems internationally, and in the UK, to identify best practices to support spinouts to generate greater investment and grow faster in the UK.

TenU, which represents leading universities’ technology transfer teams, is backing the Government to build a thriving, UK-wide spinout ecosystem by fully implementing recommendations of the independent spinout review – including increasing the amount of proof-of-concept funding available.

The call is backed by the reports’ authors, Professor Irene Tracey CBE, Vice-Chancellor of the University of Oxford and Doctor Andrew Williamson, Managing Partner of Cambridge Innovation Capital.

They will be speaking at the TenU event alongside Tim Haines, Executive Partner at Abingworth and Chair of TenU and Professor Dame Jessica Corner, Executive Chair of Research England.

Over the last 12 months universities, founders and investors have aligned behind the recommendations of the review and, working with Research England and Government, have made progress in implementing them.

• The Spinout Review recommended adoption of the USIT guides led by TenU, which have proposed a blue-print for spinout deals, including founder-friendly equity stakes, that speed up and simplify the process of setting up a spinout. According to Research England, 39 universities have already adopted the best practice approach – a key recommendation from the review. Over the last year, analysis shows that the average amount of university equity in spinout businesses has been declining over time.
• More and more universities are collaborating with each other and other institutions, creating innovation ecosystems – another critical recommendation. Research England is providing over £4,700,000 among 13 successful collaborations bringing together 49 different higher education providers.
• The report also recommended an increase in proof-of-concept funding, which allows academic inventors to test and demonstrate the viability of their ideas as marketable technologies.  At the Budget the Government announced £40m over five years in proof-of-concept funding. TenU has described this as a welcome move but argues that going further could increase the number of successful spinouts (see below).
• TenU will be leading discussions with the sector and government to underline the importance of POC funding to attract domestic and foreign direct investment and optimise implementation of proof-of-concept funding across the country to make sure it is deployed in the most cost-efficient way.

Ananay Aguilar continues,  “Last year’s independent spinout review was a huge milestone, showing how spinouts in the UK can flourish and drive growth. As a resul,t an increasing number of universities have adopted our USIT Guides and organisations are coming together to create thriving eco-systems.”

“We would like to see the Government build on these positive steps by expanding access to proof-of-concept funding to help high-potential innovations attract investment so those spinouts can flourish, create jobs and drive growth.”

Professor Dame Jessica Corner, Executive Chair of Research England said:

“I believe that Professor Irene Tracey and Dr Andrew Williamson produced an important review that will last. Their expert review on this complex topic, balances the different university, founder and investor perspectives and offers sound ways forward for the future.”

“It gives us the building blocks to develop next generation entrepreneurs, unlocking private sector value from the research base, raising investment for the UK and delivering for societal good.

“I’m proud that Research England has taken the lead role in its implementation, and working with universities, founders and investors, we have already reached a number of important milestones.”

Doctor Andrew Williamson, Managing Partner of Cambridge Innovation Capital, added:

“As Irene and I said at the time, the UK has a unique opportunity to build a world-leading innovation ecosystem and set up the next generation of spinouts to flourish.”

“We put forward a vision of the future, where universities collaborate with partners and each other to create spinouts on market competitive terms; where academics are encouraged to realise impact from their ideas through spinouts and where founders can access the right support to create successful spinouts.”

“I’m delighted to see the progress the sector has made. But above all, it is essential that as a country we invest in these companies to ensure they can have the best start and then scale and stay in the UK. Ultimately, this will help grow the economy, attract more talent, and drive the growth the Government is rightly looking for.”

Xampla pioneering biodegradable solutions to combat plastic pollution

Xampla is at the forefront of the fight against plastic pollution, offering innovative, biodegradable alternatives to single-use plastics that seamlessly integrate into manufacturing supply chains. Spun out from the University of Cambridge in 2018, Xampla’s technology unlocks the power of natural plant polymers and was discovered by Professor Tuomas Knowles and his team at the Yusuf Hamied Department of Chemistry and commercialised as Xampla by Tuomas and Dr Marc Rodriguez-Garcia. The commercialisation journey began with a £60,000 EPSRC IAA funding in 2018, proof-of-concept funding that was pivotal in demonstrating the commercial potential of their self-assembled plant protein materials for products like films, coatings, and microcapsules.

Cambridge Enterprise played a crucial role in the company’s formation, securing three key patents and supporting early funding rounds, including a £2 million Seed round co-led by Amadeus Capital Partners and Horizons Ventures. In 2023, Xampla launched the Morro™ brand to house all of its applications that seek to eliminate plastic pollution; like plastic-free coatings for food service, soluble films for dishwasher tablets and edible films for food packaging. A notable partnership with Gousto resulted in the world’s first sellout edible stock-cube wrapper made from plants. Xampla, the UK’s first university spinout to achieve B Corp status, continues to scale production through licencing agreements, such as with UK-based manufacturer 2M. With a total investment of £14 million, Xampla is building alliances with companies like Britvic, ELEMIS and Huhtamaki, aiming to eliminate polluting plastics from supply chains and reduce reliance on fossil fuels.

Image credits:

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Text: Xampla