UCL announces £100 million investment fund for spinouts in biomedical science and AI
UCL Technology Fund will allocate £100 million to UCL-affiliated research firms in order to commercialise their research in AI and biomedical science.
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UCL has announced a new £100 million investment fund that will help to finance university spinouts developing research and products in biomedical science and artificial intelligence (AI). UCL Technology Fund (UCLTF) was launched in 2016 with a total of £50 million to be invested in “commercialising [UCL’s] world-leading research” in life, computer and physical sciences over the following five years. UCL has now revealed Fund 2 - a second round of funding which will be used to further this aim in the coming years.
In conjunction with UCL Business (UCLB), the fund is managed by the investment firm AlbionVC, a branch of Albion Capital which specialises in technology and currently has around £500 million invested in venture capital.
Only firms with a prior connection to UCL will be eligible for funding as the scheme is aimed at university spinouts. Whilst start-ups and spinouts are both fledgling businesses, a spinout is founded when a parent company — most commonly a university — moves some of its assets into a separate corporate entity in return for a minority share. The spinout is therefore joint-owned by its founders and the parent company.
UCLTF made 45 investments during the first round of funding and it estimates that the 27 research projects which became fully-fledged spinout companies have since raised over £1 billion in external funding. Notable success stories include Bloomsbury AI, which specialises in natural language processing technology (NLP) and was bought by Facebook in 2018 for reportedly up to £22 million ($30m). Two of the firm’s founders, Sebastian Riedel and Guillaume Bouchard, had previously worked at UCL in senior research roles.
Research conducted by Professor Bobby Gaspar and Professor Adrian Thrasher of the UCL Great Ormond Street Institute of Child Health also formed the foundation for Orchard Therapeutics, which has developed a technique to restore normal gene function in genetic diseases, using a modified sample of the patient’s stem cells. After receiving funding from UCLTF, Orchard Therapeutics went on to raise $225 million in its initial public offering on the NASDAQ stock exchange in 2018.
In the announcement, UCL states that Fund 2 offers investment opportunities in university research into gene therapy, cell therapy, drug discovery approaches as well as AI and quantum computing. In addition to previous investment partners, the second fund has also received backing from several new companies including a cornerstone commitment from British Patient Capital, “the largest UK-based [Limited Partner] investor in venture capital.”
Stakeholders are eager to emphasise the societal benefit that the fund provides alongside its commercial opportunities. While Dr Anne Lane, the Chief Executive of UCLB, states that the technology fund has been a “great success in commercialising groundbreaking research and finding value,” she also believes that it has “helped progress work in physical and life sciences with a real and positive impact on people’s lives.”
While other industries are navigating financial difficulty during the coronavirus crisis, Andrew Elder, a deputy managing partner at AlbionVC, has indicated in a statement to the Telegraph that the fund’s managing company is not concerned about the impact of the pandemic on medical investment, stating that it is “still going to be a very good place to be investing. Scientific research is not going to be negatively impacted.”