Equity investment into UK spinouts | 2022


Executive commentary

Moray Wright
Chief Executive Officer, Parkwalk

This year’s report shows an increased appetite for first-time equity deals and a record level of overall funding for spinouts. Whilst this is a positive step in the right direction for the sector, we still believe that despite the world leading research produced here in the UK, deeptech is still hugely underfunded at the scaleup stage, especially from UK investors.

It is pleasing to see an overall recovery in the spinout sector with investments surpassing the previous pre-pandemic peak. We still believe that despite the world leading research produced here in the UK, deeptech is still hugely underfunded at the scaleup stage, especially from UK investors.

Henry Whorwood
Head of Research and Consultancy, Beauhurst

Spinout companies are working on commercialising some of the most valuable and innovative intellectual property that comes out of the UK’s universities. Understanding the investment going into these companies is crucial because it is that investment that will allow those companies to grow, and that growth will allow the innovation to reach consumers, patients and industry—ultimately to change lives.

Last year saw a record amount of investment into spinout companies: over £2.5b. This figure represents just under 10% of the total amount of investment into UK private companies in 2021. In addition to this, a record number of new spinouts raised their first round of equity investment in 2021. 102 spinouts raised investment for the first time—an increase of 38% on the previous year.

Key figures


Equity investment secured by spinouts between 2012 and 2021.


Equity deals secured by spinouts between 2012 and 2021.


First-time equity deals secured by spinouts in 2021.


Equity deals into spinouts in 2021 with the participation of international investors.


Exits via IPO undertaken by spinouts between 2012 and 2021.


Exits by acquisition undertaken by spinouts between 2012 and 2021.

Equity investment

Over the last decade, the number of equity investment deals into companies spun out of academic institutions has climbed in an upward trend, representing both increases in the number of spinouts existing in the ecosystem and the amount of interest that spinouts are receiving from investors.

The combined value of these deals increased 527% from £405m in 2012 to £2.54b in 2021 through an overall trend in growth, but with a slight drop in value in 2019 and 2020. This was likely a result of macroeconomic factors such as Brexit and the COVID-19 pandemic, and consequently some investor hesitancy. Figures for 2021 represent a return to the investment value that would have been expected from the growth trajectory that occurred between 2013 and 2018.

More than a thousand academic spinouts raised equity investment between 2012 and 2021, demonstrating the importance of this type of high-growth company to the innovation ecosystem. Spinouts often come from vital sectors such as diagnostics and medical devices, pharmaceuticals and other healthcare, materials technology, and clean energy.

Equity deals by number and stage

The number of spinout companies raising their first ever deals peaked in 2021, at more than a hundred for the first time. Whilst the value of equity deals was highest in 2015 and 2016, this was the result of some unusually huge initial deals to a number of pharmaceutical companies. In 2015, this included £88m to TauRx Pharmaceuticals, £30m to Autolus and £25m to Freeline Therapeutics, as well as £39.9m to Apollo Therapeutics in 2016.

In comparison, the highest initial deal in 2021 was a £6m round to Alethiomics. As the deals by stage of evolution chart shows, the number of spinouts receiving seed-stage funding in 2021 is the highest it has ever been, indicating investors remain interested in young and ambitious firms. Later stage investment deals have remained more stable in number over the last decade; 2021 deals in the venture stage are very comparable to 2019, 2018 and 2017.

Top equity deals

The companies raising the biggest investment deals in 2021 come from several different sectors, illustrating the talent and innovation of spinout companies is healthy and varied. Oxford Nanopore Technologies, spun out of the University of Oxford, is known for developing novel DNA and RNA sequencing technology. Since launch, the firm has raised a staggering 17 funding rounds totalling over £850m, including its latest £195m deal in May 2021 raised from IP Group, Wellington Management, M&G ­Investments, Temasek and Nikon, among other investors. The spinout went on to list on the London Stock Exchange in September.

The next biggest deal went to a very different industry; Graphcore has created processor technology, the Intelligence Processing Unit (IPU), optimised for machine-learning tasks and specifically designed for AI computing. Graphcore, spun out from the University of Bristol, has rapidly grown since its 2016 incorporation and its 2021 deal of £162m was the seventh funding round for the firm. Backers included Molten Ventures, Baillie Gifford, Fidelity International, Schroders, and Teachers’ Innovation Platform (TIP).

Top investors

A top investor in 2021 was Parkwalk, participating in 31 deals to back UK spinouts. These included University of Cambridge therapeutics spinout PhoreMost in a £35.4m deal—co-investing with BGF Growth Capital, Astellas Venture Management, o2h Ventures, Morningside Group, Trend Investment Group, XtalPi Inc, and business angels—as well as University of Oxford diagnostics spinouts Brainomix in a £17m round with the University of Oxford Innovation Fund (UOIF), Boehringer Ingelheim Venture Fund, and Tencent.

Regional funds have also played an important role in supporting the growth of innovative spinout companies across the UK. Scottish Enterprise, also participating in 31 deals in 2021, has assisted in the development of a number of Scottish spinouts such as mycoprotein producer ENOUGH and biofuels company Celtic Renewables.

The Future Fund, a government support scheme backed by the British Business Bank, was also involved in a number of deals into spinouts in 2021. The scheme offered between £125k and £5m, subject to at least equal match funding from private investors, and aimed to help companies facing financial difficulties caused by the pandemic.

Top universities

Unsurprisingly, the top institutions for the number of equity deals secured were the two universities with the highest spinout populations: the University of Oxford and the University of Cambridge, at 57 and 42 deals respectively.

Compared to the same ranking in 2020, the University of Bristol has risen from ninth to third. Bristol’s biggest spinouts include processor developer Graphcore and biotechnology and regenerative medicine firm Mogrify—both of which remained headquartered in the city.

London also features highly on the ranking of universities, forming the ‘golden triangle’ with Oxford and Cambridge, with the three accounting for a significant amount of the spinout population. However, the University of Edinburgh, Queen’s University Belfast, and University of Strathclyde also feature in the top ten, showcasing the innovation talent outside of England.

The top three institutions for the number of deals secured by their spinouts were also the top three for combined value. Four spinouts from the University of Oxford raised megadeals—deals of more than £50m—in 2021, significantly contributing to its place at the top of this ranking. Oxford Nanopore Technologies raised £195m in May, while biotherapeutics firm Evox Therapeutics secured £69.2m in February and vaccine developer Vaccitech secured £121m in March. PepGen, which moved its headquarters to the US in 2020, raised equity of £81m from Oxford Science Enterprises and a number of American investors.

The University of Dundee notably ranked highly despite its spinouts securing eight deals in 2021. This was largely due to Exscientia’s three large investments: £21.5m in March, £162m in April and £25.4m in September. Incorporated in 2016, the Dundee-spinout then exited through an IPO in October.

UK vs foreign investment into spinouts

Between 2012 and 2020, the vast majority of equity investment into spinouts came from deals solely involving UK investors. These investors have been vital in cultivating the role of spinouts in the innovation ecosystem, providing financial backing for growth. Some funds have a clear link to the institution in their name: Oxford Science Enterprises; the University of Cambridge Enterprise Fund, managed by Parkwalk; and the University of Cambridge Seed Funds, managed by Cambridge Enterprise.

In 2021, there was a significant rise in co-investment between UK and international investors into spinouts and the cause is still emerging. A number of funds headquartered abroad chose to co-invest with the British Business Bank’s Future Fund, a scheme that required at least equal matching from other investors, creating an opportunity for co-investment. The increase in international investor interest may also caused by expectations surrounding spinouts’ innovative solutions to the pandemic; commercialised research from top UK universities is closely scrutinised by investors. Notable spinout investor Oxford Science Enterprises co-invested with foreign investors more than ever before in 2021.

Investor nationality

The number of international funds participating in equity deals into spinout companies demonstrates the strength of the UK’s high-growth ecosystem. During the pandemic, ambitious business attracting foreign investors has been important in boosting the economy and creating jobs across the country. The biggest source of international investment was by far the United States, likely due to the high number of firms headquartered there that are able to offer private equity and venture capital. Some commentators have also been predicting an increase in US investment since Brexit.

Funds located in the Netherlands have overtaken Chinese firms in the number of deal participations since last year’s ranking. Dutch sources of investment for UK spinouts over the last ten years include Forbion Capital Partners, the Doen Foundation, Esperante Ventures, Merck Group’s M Ventures, and BioGeneration Ventures. Meanwhile, major Chinese funds include Tencent, 5Y Capital, and Puhua Capital. In 2021, Tencent participated in Vaccitech’s £121m round alongside investors from the UK, US and Monaco. Both Tencent and Puhua Capital were investors in bit.bio’s £77m round alongside numerous US-based funds and Estonian firm Metaplanet.

Top exits by valuation

Over the last decade, a number of spinouts from UK universities have had highly valuable exits, either through IPO or acquisition. The largest ever IPO of a spinout occurred in September 2021—Oxford Nanopore Technologies listed on the London Stock Exchange after raising equity deals with a combined value of more than £850m. The firm has seen enormous growth over the last few years, increasing its turnover 726% between 2017 and 2020 from £13.8m to £114m.

University of Dundee spinout Exscientia also exited via IPO very recently in October 2021. Exscientia raised £300m over seven equity rounds and received £5.4m in grants before listing. Orchard Therapeutics’ 2018 IPO on NASDAQ remains one of the most valuable spinout exits. The business was spun out from both the University of Manchester and UCL.

Although acquisitions form fewer of the top exits by valuation than IPO, acquisitions are a far more popular way to exit the ecosystem, with 134 spinout companies acquired between 2012 and 2021 compared to 32 undertaking IPOs. The most valuable acquisition of a spinout was Ziylo, a biotechnology company built out of research at the University of Bristol. Ziylo was bought in 2018 by Danish pharmaceutical firm Novo Nordisk.


Beauhurst tracks all spinouts deemed to have spun out on or after 1 January 2011. Spinning out from an academic institution is one of our eight criteria (outlined here) that we believe suggests a company has high-growth potential. Companies that spun out of an academic institution prior to 1 January 2011 may still be included in this analysis if they met one of the other seven triggers after 1 January 2011 and then were subsequently determined to be a spinout.

Equity investment

To be included in this analysis, any investment must be:

  • Secured by an academic spinout (as defined below).
  • Some form of equity investment.
  • Secured by a non-listed UK company.
  • Issued between 1 January 2012 and 31 December 2021.
Academic spinouts

We define an academic spinout as a company that meets condition 1 and at least one condition out of 2-4:

1.  The company was set up to exploit intellectual property developed by a recognised UK university or research institution (This is broadly in line with the Higher Education Statistics Agency’s (HESA) definition of a spin-off).

2.  The institution owns IP that it has licensed to the company.

3.  The institution owns shares in the company.

4.  The institution has the right (via an options or warrants contract) to purchase shares in the company at a later date.

About us

Beauhurst is a searchable database of the UK’s high-growth companies.

Our platform is trusted by thousands of business professionals to help them find, research and monitor the most ambitious businesses in the UK. We collect data on every company that meets our unique criteria of high-growth; from equity-backed startups to accelerator attendees, academic spinouts and fast-growing scaleups.

Our data is also used by journalists and researchers who seek to understand the high-growth economy, and powering studies by major organisations—including the British Business Bank, HM Treasury and Innovate UK—to help them develop effective policy.

Find out more about Beauhurst’s bespoke research and consultancy services here.

Parkwalk is the largest growth EIS fund manager, backing world-changing technologies emerging from the UK’s leading universities and research institutions.

With £400m of assets under management, it has invested in over 150 companies across its Parkwalk Opportunities and Knowledge Intensive EIS Funds, as well as the award-winning enterprise and innovation funds Parkwalk manages for the Universities of Cambridge, Oxford, Bristol and Imperial College.

Parkwalk invests in businesses creating solutions to real-world challenges, with IP-protected innovations, across a range of sectors including life sciences, AI, quantum computing, advanced materials, genomics, cleantech, future of mobility, medtech and big data.

Learn more about Parkwalk here.


Find this report as a PDF here.