Spotlight on Spinouts 2023: breakdown of the academic spinout economy
A recent publication from Beauhurst and the Royal Academy of Engineering Enterprise Hub evaluates the UK’s university spinout economy and identifies new rapidly growing spinout clusters. This year’s Spotlight on Spinouts report highlights trends in the growth in number of academic spinouts, proving that the UK is on its way to becoming an innovation leader.
In addition to the factors analysed in the previous two years, this year’s report also includes aspects of spinout activity, including universities that have shown the highest growth in their spinout populations in the past two years, along with a detailed examination of the gender composition of founders and directors over a period of time. These numbers reveal areas of change and development in the UK spinout economy.
The University of Oxford with the greatest number of spinouts again
In the years Beauhurst has been conducting the report, the University of Oxford has been surpassing other educational institutions with the number of spinouts created. Additionally, the University of Cambridge placed second once again. A few universities saw immense growth, including the University of Leeds, with a 28% growth rate from the previous year. Aston University made its first appearance on the top 10 of the list, highlighting how dynamic the ranking is.
Pharmaceuticals is the top industry for spinouts
The life sciences sector remains the dominant force in terms of the number of spinouts, with cleantech also exhibiting a prominent presence. Pharmaceuticals topped the list with 309 spinouts, closely followed by research tools/reagents with 279 spinouts. The sector that saw the most growth for spinouts was artificial intelligence (AI), followed by genomics and precision medicine. These findings highlight that spinouts are leading the way in technological advancements and playing a crucial role in addressing global issues.
Investment in spinouts five times the amount it was 10 years ago
The report revealed that investment in spinouts has increased a staggering amount in the past 10 years, with spinouts receiving £402 million in 2013 compared to £2.1 billion in 2022. Despite the uncertainty of the economy, there was only a slight decline in investment from 2021 to 2022, from £2.5 billion to £2.1 billion. Additionally, the average investment size in 2022 has seen a 187% increase from 2013.
Nexeon was the top investee of 2022, with £224 million raised in equity. The top investors by number of equity deals were Parkwalk and Scottish Enterprise, whilst Oxford Sciences Enterprises maintained its place as the top investor by value of equity deal since 2013. Foreign investors also made appearances on the list of top investors, emphasising that the UK is on track to becoming a global innovation leader.
Increase in the proportion of female spinout founders
Beauhurst compared figures on the spinout founders’ gender from 2016 to 2021, with the data highlighting that there has been a clear increase in the female founding teams, from 0% to 12.8% and mixed gender teams increasing from 17.5% to 19.8%. This shows that more diverse teams are receiving investment, however, Beauhurst notes that ethnicity was not a part of the data set, which is an area for improvement that needs to be studied.
The trends in the UK spinout economy highlight that the UK is on its way to becoming a science superpower, with the life sciences sector dominating and high investments in spinouts continuing despite the uncertain economy. The report also reveals that the gender diversity of spinout teams is improving, however, there is room for more information to be collected. With the rapid growth rates the University of Leeds and Aston University saw, as well as the increase of spinouts in the AI sector, the report also shows how dynamic the academic spinout economy can be. It will be interesting to follow how the spinout industry continues to change and what new trends may arise.
Written by: Andrew White