Investments in UK spinouts reached unprecedented levels last year, according to a new report from spinout investor Parkwalk and data analytics group Beauhurst.
The report found UK spinouts raised a record £3.35bn in 2024, up 44.3% from the previous year, reflecting both strong investor appetite and performance from companies formed from university research.
Parkwalk notes that spinout investments saw a dip in 2023 that was more than recovered the following year. The average value of equity investments rose from £4.96m in 2023 to £7.49m in 2024.
“Spinouts are the future of this economy. It is where the UK has real comparative strength – capitalising on our world-leading research base,” said Parkwalk chief executive Moray Wright.
“The companies raising record sums of investment in 2024 are tackling the biggest challenges of our time – from climate change to AI and healthcare.
“With the right policy environment, including long-term support for the Enterprise Investment Scheme and full implementation of the Mansion House reforms, we can ensure that the UK fully leverages its potential in frontier innovation.”
Looking at sectors, life sciences unsurprisingly led the pack, including pharmaceuticals and biotech. Deep tech, AI and data infrastructure firms also faired well, in line with government ambitions outlined in the Modern Industrial Strategy.
Parkwalk’s report also found that it was the most active investor in UK spinouts last year, having been involved in 41 deals, which rises to 54 when including its parent IP Group.
“The UK has nurtured one of the world’s leading ecosystems for academic innovation – but without scale-up capital, we risk missing a once-in-a-generation opportunity,” said Greg Smith, chief executive of IP Group.
“Chiefly, we should leverage deep pools of domestic institutional capital – providing UK savers with access to the most exciting investment opportunities whilst unlocking funding to fuel growth.”