Oxford Sciences Innovation (OSI), the recently-launched university venturing fund of the eponymous institution, has grown past its £300m ($474m) target to £320m with the backing of Google Ventures.
The tech giant’s corporate venturing unit was joined by Sir Charles Dunstone, the founder of telecoms retailer Carphone Warehouse, and a consortium of private investors. Existing backers include commercialisation firm IP Group, Oxford’s Endowment Fund, charity healthcare investor the Wellcome Trust, and investors Woodford Investment Management, Invesco, and Lansdowne Partners, the latter two of which are also backers of university venturing at Cambridge and Imperial College London.
Tom Hulme, general partner at Google Ventures, who said that the investment represents Google’s belief in Oxford to “develop the next generation of scientific breakthroughs”, will join OSI’s advisory board along with fellow general partner Krishna Yeshwant. Also joining the board will be renowned artificial intelligence (AI) researcher Demis Hassabis, founder of Deepmind, an AI startup now owned by Google. Deepmind has already benefited from Oxford research, having acquired Oxford AI spin-outs Dark Blues Labs and Vision Factory last year, and has made an unspecified donation to the university to form a research partnership which will boost Oxford’s computer science and engineering departments.
Not counting Stanford’s uncapped fund to back startups coming out of its student-led incubator StartX, OSI is the largest university venturing fund in the world. Working with Oxford’s technology transfer office (TTO) Isis Innovation, the fund will be focused purely on spin-out companies coming from the university, as well as the Harwell and Culham labs inside Oxford’s tech cluster.
Announced in May with £210m already committed, OSI is looking to fill the void of early-stage funding typically associated with any university looking to translate its research into the real world. It will be investing in spin-outs across different sectors at different stages of development. Crucially, the fund will have a long term view on investments, which is an essential requirement for some university spin-outs as developing a company based on university intellectual property can take longer than the typical venture capital investment will allow. Running for 15 years, OSI will have the right to acquire 50% of the university’s equity in a spin-out, while the university will retain a 5% protected stake in OSI.
Oxford University had the largest university spin-out exit recorded by Global University Venturing in 2014 with gaming firm NaturalMotion. Based on research from Oxford’s zoology department, the spin-out was acquired by fellow gaming firm Zynga for $527m, a deal which netted $50m for the university. Since then, Oxford’s offering into the burgeoning immunotherapy market, Adaptimmune, held a series A for $104m before holding an IPO in April worth $191.3m. Since establishing in 2000, Isis has launched 100 Oxford spin-outs, eight of which were in the last year alone.
David Norwood, chairman of OSI, said: “We are building a very special and unique partnership at OSI. We are now in a position to combine Oxford University’s proud history, with cornerstone investors and Board-level advice from some of the best minds in the tech industry to turn world-leading science into market-leading companies.”
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