The VC firm is raising money from investors for its second UK spinout fund.
Venture capital firm Milltrust Ventures, a longtime investor in UK university spinouts, is looking for corporate investors to join its new food and health-focused fund that will invest across the country’s academic research sector.
Corporate investors represent a large portion of the overall investment community in spinouts and help to validate the technologies they invest in, says Simon Hopkins, CEO of Milltrust International Group, the parent investment firm of the ventures arm, which has offices in the UK and Singapore.
“Corporate venture capital firms are probably the biggest single players in this space,” says Hopkins. “We are always looking for corporate investors to come in because that really endorses the technology.”
This is the second spinout fund that Milltrust has launched. Its previous fund, $100m British Innovation Fund I, is fully closed and exited. Corporate investors have participated in the fund’s prior investments. These include Polymateria, a developer of biodegradable materials for plastic packaging spun out of Imperial College London. Indorama Ventures, the CVC arm of Thai chemical company, is an investor.
Another portfolio company, BugEra, which transforms oil production from genetically engineered black soldier flies into a renewable source of biofuels, attracted Renewable Energy Group, a large producer of biofuels for the aviation sector, as an investor. Renewable Energy Group was acquired by US oil and gas company Chevron in 2022.
Milltrust’s new investment vehicle, called the Future Health Fund, will focus on investments in agritech, the future of healthcare, climate tech and alternative proteins.
The closed-end fund has a 10-year lifecycle and will invest at the pre-seed to series A stages. Up to 35% of investee companies can be located outside of the UK but must have a connection back to the UK academic sector.
Hopkins is keen to differentiate his spinout fund from other spinout investors in the UK that are structured as investment firms modelled on an evergreen, open-ended structure. These kinds of investors often charge large management fees for an indefinite amount of time, says Hopkins.
Large spinout investors in the UK such as Oxford Science Enterprises, the investment firm associated with the University of Oxford, and Cambridge Innovation Capital, an investor in spinouts associated with the Cambridge ecosystem, are structured this way.
“The problem is no one wants to commit money indefinitely,” says Hopkins. “If you raise a lot of money and you just sit there clicking the fees, the incentive to make it work is much less than if you have to go out and really deliver returns and raise one fund after the next.”
Milltrust has pre-seeded its new fund with 12 companies, some of which have already had funding rounds. Spinouts in the portfolio include Cody Genetics, a gene-editing technology to produce sex-biased, non-GMO offspring to improve farm profitability, sustainability and reduce inhumane culling of farm animals. Another portfolio company is IRNovate, which has invented a non-invasive way of diagnosing liver disease.
