Manchester, Bristol lead way for spinout growth – report
Manchester and Bristol have the highest growth in the number of new spinouts in the UK, a report has revealed.
Manchester is home to 58 spinouts, up from 52 last year, while 47 spinouts are based in Bristol, up from 42 – the highest proportional growth in spinout creation.
The data, compiled by research firm Beahurst, shows that spinout growth is expanding beyond the ‘golden triangle’ of universities in London, Oxford and Cambridge.
Edinburgh is home to 78 spinouts, with the report citing the city’s “strong research institutions, funding ties, and access to top talent”.
Recent spinouts from the University of Manchester include Apini Therapeutics, AI company Imperagen and online water managment platform Nexsys.
“The remarkable growth of university spinouts outside the ‘golden triangle,’ exemplified by Manchester, Bristol, and Edinburgh, presents a compelling case for nurturing innovation hubs across the country,” said Maria Dramalioti-Taylor, partner at Beacon Capital LLP.
In total, there are 1,166 active spinouts in the UK, according to the report by the Royal Academy of Engineering Enterprise Hub and Beauhurst. Over half (56.5%) of these are at the seed stage.
Average investment into spinouts has risen by 187% since 2013 up to last year, with the average deal size standing at £3.91m.
Tim Mills, managing partner, ACF Investors told UKTN: “University spinouts are a vital – but often overlooked– area of the innovation economy and it is essential that we improve the process if the UK is to fulfil its science superpower ambitions.”
Universities take smaller stakes
UK spinouts last year attracted £2.13bn in 376 deals, down £420m across 399 deals from the year before.
Minister for Science for the Department for Science, Innovation and Technology, George Freeman MP said: “This report shows that with the right backing, we can make a success of spinning out businesses in every part of the country.”
The report also found that universities are taking a smaller stake in spinouts, declining from 24.8% to 17.8% between 2013 and 2022.
Women-founded spinouts are increasing in number, accounting for 12.8% of spinouts formed in 2021.
“We tend to see startups at the earliest stages of R&D due to the need to create IP – and are definitely sensing an increase in activity outside the golden triangle,” said Sara Holland, patent attorney at Potter Clarkson. “This is both in terms of spinouts and startups. People are feeling more confident to set up shop in the ‘provinces’.”
However, Holland added that there “remains work to be done” to drive spinout growth beyond London and the South East.
“Just yesterday I met a startup originating from Liverpool that moved to London to be where the investment is,” she said. “This is happening across the UK and we need to stop this flood of talent down south, by increasing the flow of capital to the businesses with the highest potential – irrespective of where they reside.”
In March, the government launched a review to explore how the UK can better utilise the work of university spinouts to boost economic growth.