Epidarex pulls the pieces together

Epidarex’s successful £47.5m ($79.5m) fundraise makes for a prime example of universities putting their money where their mouths are. Formerly known as Rock Spring Ventures, the fund is looking to bridge the funding gap in UK life sciences – with the aim of becoming a “local champion” for the sector.

The fund has attracted four UK universities as limited partners for the fund: King’s College London, Glasgow University, Edinburgh University, and Aberdeen University. While the fund will be looking to invest in UK life science startups in general, the four universities’ spin-outs will automatically be a higher priority target of investment by Epidarex, which is also supported by pharmaceutical firm Eli Lilly, the European Investment Fund, Scottish Enterprise, and Strathclyde Pension Fund.

While universities acting as limited partners – normally making investments through endowment funds – is increasingly common in the US, with examples such as Osage University Partners and Drive Capital making recent headlines, it is still relatively rare this side of the Atlantic. However, for universities which do participate in such funds, the benefits are obvious. Working together allows universities to pool together on a larger fund. Investments made by the institutions are likely to also attract corporates, in Epidarex’s case Eli Lilly, which in turn could lead to stronger academic-industry partnerships down the road. And, of course, it puts together a fund targeted on university innovation.

The fund is also a massive boon for Scotland as a whole, which is due to hold a referendum on whether to stay in the UK or become independent later this year. With the possibility of a financial exodus from Edinburgh to London on the cards should Scotland go it alone, having targeted funds supporting Scotland burgeoning life sciences sector will become all the more crucial to the long-term success of an independent Scotland.