Beyond the Capital with South West investor QantX

QantX began life as a group of six angel investors backing startups in South West England. Its Devon-based founders, Richard Haycock and Sir Richard Olver, saw an opportunity to improve the commercialisation of the region’s intellectual property and increase the availability of capital for startups working in sustainability and modern healthcare.

“The aim really was to create high-quality jobs in the South West,” said Haycock, who is also the CEO of Qantx.

In an interview with UKTN, Haycock said the region has a lack of commercial expertise and global connectivity, which means it is often grappling with businesses moving elsewhere in the UK.

“There are parts of the South West which are literally the poorest in England,” Haycock said. “The average wage is very low. And a lot of businesses that are stunted actually then migrate out of the region, whether for additional capital or availability of the right talent.”

Despite these challenges, the region is full of talent, according to Haycock.

“I would say that the human capital available in the region is as good as anywhere in the UK,” Haycock said.

The angel predecessor to the venture capital firm deployed near to £2m into companies including nanophotonic firm Attomarker and carbon accounting software Spherics, among others.

Angel to fund

Haycock and Olver, who met while mentoring startups, launched QantX off the back of the angel group’s efforts. It has collected £10m from South West interested high-net-worth individuals in around three months for its first fund. It is backing pre-seed and seed-stage startups in the region.

Fund 1 has gone on to make nine investments, including “fridgeless” vaccine spinout EnsiliTech out of the University of Bath, which raised £1.2m in January.

Haycock revealed that University of Exeter spinout Senisca, which is working on methods to reverse cell ageing, is now conducting another funding round with a “significantly higher valuation”.

And Access Industries, a privately-held industrial group, awarded £1m to QantX to help the commercialisation of tech and science discoveries.

Through QantX’s “Blavatnik Prize for Innovation” scheme, it is dishing out grants of up to £50,000 in non-dilutive funding and advice.

The first recipient was University of Exeter lecturer Dr William Short for his search engine context software.

Now QantX is working on raising £100m for its second fund, split equally between sustainability and modern healthcare. Talks are currently underway, with plans to launch Fund 2 as early as the middle of 2024.

Multiplying the South West

QantX’s team of five does not have an official headquarters but has offices at Tremough Innovation Centre, Exeter Science Park and Engine Shed in Bristol.

Haycock, who was previously at Oracle, is bullish about the innovation pipeline in the South West.

“I think the reality is that in five years’ time, we’ll be seeing significant exits for some of our companies,” he said. “That in turn then attracts spinout entrepreneurship from successful companies, so you’ll see a multiplier effect.”

This will cause startups and investors to flock around Exeter, Haycock explained.

“My early days of working were in California and Silicon Valley in the 80s. You could walk down the streets of Palo Alto for example and there’s a VC every other door, even in the 1980s. So once that happens, success breeds success.”

Beyond the Capital, an interview series with tech investors and venture capitalists based outside of London, is published monthly. Last month UKTN spoke with Leeds-based investor YFM Equity Partners.