A new report shows that spinouts can generate ROI worth more than double the original capital raised, within 20 years. On average, £1 of capital raised has led to values of £2.30 at companies from the 10 UK universities with the highest value spinouts. Heading the list is the University of Bristol, where spinouts have averaged 285% increases in value compared to initial capital.
The report reveals that the University of Bristol’s most successful spinout of the last decade is Ziylo, which is valued at £616.6 million and was acquired by global healthcare company Novo Nordisk in 2018.
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The top 10 most successful universities for spinout success also include Imperial College London, UCL, the Oxbridge universities, the University of Dundee and the University of Southampton.
The University Spinout Report 2021 was produced by IP specialists and R&D tax credit experts GovGrant to celebrate the UK’s proud history of innovation. It is based on analysis of just under 1,000 UK spinout companies, a sample that comprises £19.08 billion of capital invested, 4,489 deals and 1,907 investors.
Pharma and biotech lead the way
The pharmaceuticals and biotechnology industry has 8 of the 10 highest-valued spinout companies to come from UK universities in the last decade. After University of Oxford spinout Vaccitech played a key role in Covid-19 vaccine development, the investment spotlight has focused firmly on the potential of pharma and biotech knowledge at UK higher education institutions.
“For growth and commercial success, follow-on investment is also critical, as is access to executive talent that has experience in globalising deep-tech, science-based ventures”
– Simon Bond, Innovation Director at SETsquared

According to a recent PitchBook report, more cash was invested in UK biotech businesses last year than in any previous one. £1.5bn was invested in the sector in 2021 – comprising a total of 165 deals – almost double the amount that went into UK biotech businesses a year earlier.
Simon Bond, innovation director at startup and spinout incubation programme SETsquared, says, “In the early stages of the spinout, access to patient risk capital is critical. The growing appetite for deep-tech, science-based ventures (greatly encouraged by the UK tax regime’s S/EIS programmes and R&D tax credits) is really helping. The tremendous work of the UK Business Angels Association is also raising awareness, increasing expertise and organising syndicate investing among angels and angel networks.
“However, early stage risk capital is still in great demand, and is underserved by angel and series A investment sources.
“For growth and commercial success, follow-on investment is also critical, as is access to executive talent that has experience in globalising deep-tech, science-based ventures.”
Who are the biggest investors in university spinout companies?
The government-funded Innovate UK has by far the largest portfolio, with 277 spinouts, dwarfing all other portfolios. Top venture capital firms IP Group and Parkwalk Advisors are next on the list, with 72 and 67 spinouts respectively.
The biggest university group investors are from golden triangle universities, with the SETsquared Partnership the only non-Oxbridge investor in the top 10.
Adam Simmonds, investment research analyst at GovGrant, says, “This report highlights the huge value to the economy of UK universities, as well as their incredible depth of creativity and talent.
“It’s no surprise to see pharmaceutical and biotech spinouts feature prominently: the UK is particularly renowned for innovation in these areas. You only need to look at the recent development of Covid-19 vaccines in the UK to see how accomplished we are in pharmaceutical innovation.
“The fact that the top investor in spinouts is a government agency – Innovate UK – shows you the immense faith placed in university research and development. But with 5 out of the top 10 investor groups being venture capital firms, you can also see that the private sector realises just how profitable spinouts can be.”
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April 13, 2023
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Shona Wright
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