2021: A record-breaking year for UK spinouts
A recent publication from Beauhurst and Parkwalk has highlighted the success of UK spinouts in raising record levels of equity investment in 2021, to the sum of £2.54 billion. This figure represents an increase of almost 70% compared to the previous record-breaking investment in 2020, as well as just under 10% of the total amount of investment into UK private companies throughout 2021.
Behind these record-breaking investment levels was also a record number of foreign investors, with 40% of deals in 2021 involving participation from investors headquartered outside the UK. The majority of foreign investment came from the US, with 378 deals, however Dutch and Chinese investors also ranked highly. This surge was likely bolstered by the UK Government’s new £1.6 billion investment fund to encourage co-investment from overseas in key knowledge-intensive sectors. Not only does this mean the overall pool of capital available to UK spinouts is increasing, but it also indicates that the technologies spinning out of UK universities are becoming increasingly more attractive to investors from abroad. The top companies raising the largest investment deals in 2021 come from a number of different sectors, ranging from DNA and RNA sequencing technologies to processor technologies optimised for artificial intelligence, illustrating the diverse talent and innovation of UK spinouts.
In addition to this, 2021 also saw a record number of spinouts raising their first ever round of equity investment: 102 companies, an increase of 38% on the previous year.
Henry Whorwood, Head of Research and Consultancy at Beauhurst, wrote: “Spinout companies are working on commercialising some of the most valuable and innovative intellectual propertythat comes out of the UK’s universities. Understanding the investment going into these companies is crucial because it is that investment that will allow those companies to grow, and that growth will allow the innovation to reach consumers, patients and industry— ultimately to change lives.”
Mathys & Squire LLP works closely with a number of spinouts and institutions, so we understand the nuances faced regarding commercialisation and ownership of IP, licensing, and IP due diligence for investment. For more information, please get in touch with a member of our team.
Written by: Andrew White and Jessie Harrison