The latest international university league table compiled by data and research group QS, published in June, saw Oxford rising from fifth to fourth overall. The UK still accounts for 4 of the top 10 universities in the world.
In this piece, Tom Hopkins of Parkwalk, looks at how Oxford is producing world beating companies that are of strategic importance to the UK, and how investors can access the investment opportunities spinning out of one of the best universities in the world.
The ‘dreaming spires of Oxford’ are known around the world as a haven for learning and The Times Higher Education World University Rankings 2019 named Oxford as the world’s number one university for the third successive year.
Oxford is the largest research-based University in the UK, with a research expenditure of £707.6m in 2017. This large level of research investment translates into commercial ventures that can deliver benefits to wider society. Oxford University Innovation (‘OUI’), the technology transfer office for Oxford University, is a big driver in commercialising this research.
OUI has over 3,880 patents and applications under management, concludes around 700 technology licence agreements a year, and has helped to establish over 150 new technology companies based around Oxford intellectual property.
And activity is ramping up as the university spinout asset class becomes front and centre of the UK’s modern industrial strategy.
A growing asset class
Last year Oxford created 24 spinout companies in fields as varied as cancer therapeutics and geothermal technologies. The pipeline of spinouts from Oxford is healthier than ever, with eight company incorporations so far in 2019.
The increase in the number of spinouts is both a function of how the research budget is allocated in terms of a greater focus on spinouts from academics and students, the increased professionalisation of the spinout process and government’s support of the sector.
The Government’s industrial strategy is very much focused on university research and innovation, where the UK is a global leader already but where the Government wants to ‘double down on the investment that we have been making’.
There are 4 Grand Challenges highlighted in the Industrial Strategy: AI and the analysis of big data, clean growth, future of mobility and an ageing society. These are worldwide problems but sectors where the UK can be the global solution provider to address these issues.
And recent Oxford spinouts are addressing these areas and more.
Oxford producing winners
Oxford spin-out companies have gone on to raise in excess of £2bn in external investment, transferring technology and expertise to industry and society, and addressing the UK government’s desire for UK plc.
Clean growth and Future of mobility
For instance last year Oxford PV broke the world record for solar cell efficiency. In 2019 it recently raised £21m from Goldwind, the largest wind turbine manufacturer in the world, and also formed a strategic relationship with Meyer Berger to expand the manufacturing of its perovskite solar technology.
Also last year, the Business Secretary, Greg Clark, opened YASA’s new production facility, for its leading electrical motor, in Oxford, stating that YASA could help produce ‘a car with the speed of a Bugatti Veyron and the emissions of a Toyota Prius’. Recently Ferrari selected the YASA electric motor for the SF90 Stradale, the company’s first hybrid production series supercar
AI and an ageing society
The University also demonstrates its alignment with the Government’s industrial strategy through its collaboration with industry. An example is Lab10X, the recently announced strategic partnership between OUI, OSI, Sensyne Health plc, the British Clinical AI technology company and Evotec SE, a global drug discovery and development company.
This initiative aims to accelerate the translation of research in the fields of clinical artificial intelligence and digital health at Oxford into breakthrough digital therapeutics, clinical AI algorithms and to accelerate data-driven drug discovery and development. The technologies developed by LAB10x will be applied to generate and analyse anonymised patient datasets to improve patient outcomes and accelerate medical research and pharmaceutical R&D.
Investing in this asset class
As a result of the progress of Oxford spinouts there are are an increased number of funds now focused on this emerging asset class, attracted by the UK’s world leading position in R&D and the resulting investment opportunities.
One such fund is Oxford Science Innovation (OSI), which counts an impressive list of institutional investors amongst its shareholders including Tencent, Google Ventures and Temasek.
For retail investors Parkwalk have just launched the fifth University of Oxford Innovation Fund, with OUI as the adviser to the fund. This EIS fund will invest at the seed stage and offers alumni and investors the opportunity to invest in companies formed to commercialise scientific and technological discoveries made at the University of Oxford, in a tax efficient manner.
Both these funds leverage Oxford University’s position but also OUI’s considerable success. OUI has twice won “Technology Transfer Unit of the Year” (Global University Venturing 2014 and 2017) and is recognised as a global leader in university innovation.
As the university moves up the rankings, investors, willing to take the early stage risk, will potentially be rewarded with attractive returns.
