University-focused venture funding blooms
The first quarter of this year saw another 10 university venturing funds announced or expanded, taking to more than 100 such dedicated funds, according to Global University Venturing’s pioneering analysis of the sector.
Commonwealth Scientific and Industrial Research Organisation, the federal government agency for scientific research in Australia, said it would double to A$200m ($150m) its CSIRO Innovation Fund, with the second half of the money coming from private funders. CSIRO is also a limited partner in the Uniseed No. 4 fund, while, as part of burgeoning activity in Australia, the University of Wollongong set up a seed fund managed by Artesian Venture Partners.
In France, the Paris-Saclay University announced a €50m ($53m) seed fund (see regional profile), while Germany-based Unternehmertum Venture Capital (UVC), affiliated with the Technical University of Munich, made the initial close of its second fund at €34m ahead of a targeted €70m.
Ingo Potthof, managing partner of UVC, said the close connection to UnternehmerTUM had proved to be a decisive advantage: “This access is definitely an ‘unfair advantage’ for our portfolio companies. No other fund in Germany is able to offer such comprehensive support.”
Elsewhere in Europe, UK-based Strathclyde University set up its Strathclyde Entrepreneurs Fund (SEF). But activity has remained intense in the US, with the creation of VTC Innovation Fund, a venture capital fund primarily funded by Virginia Tech and Carilion Clinic and managed by Middleland Capital, and the $15m Rethink Education Seed Fund, a partnership between Southern New Hampshire University (which provided $10m) and venture firm Rethink Education. Excluding corporations, tracked by the GCV Analytics platform, Global University Venturing has monitored more than 200 university-focused venture programmes, of which just more than 100 are regarded by the publication as having academic or public research originations (see table below).
Over the past few years, the biggest initiatives have come out of China, the UK and US and Japan.
The UK has a large economy and globally important universities that have been innovative in using venture as a funding tool. University of Oxford (see guest comment and GUV award) started a trend when its partnership with what is now IP Group developed after during the millennium but it has been followed and lead in its patient capital initiatives by peers at Cambridge (see Lifetime Achievement award) and London.
Imperial College London’s listing of what is now called Touchstone Innovation has left the university with Imperial Innovations as its tech transfer unit and a stake in both Touchstone and Apollo Therapeutics.
Oxford Sciences Innovations, Touchstone and Cambridge Innovation Capital have raised more than $1bn through such patient capital structures, while King’s College London supported the launched of Epidarex Capital with a $159m-sized fund, while Touchstone also supported University College London’s $70m UCL Technology Fund.
But practically all university ecosystems in large economies are preparing their own plans or have announced initiatives. Japan’s $1bn-plus initiative saw Tokyo, Keio, Tohoku and Osaka announce funds. Given the University of Tokyo’s relative size and importance, most attention has probably focused on how its new UTokyo Innovation Platform will work alongside its well-established and successful University of Tokyo Edge Capital (UTEC).
As the world’s largest venture capital ecosystem, the US has lots of VC firms and connections with and funding by universities, as seen by the two launches in the first three months. However, the University of California (UC) public system has been perhaps most prominent when it announced its $250m UC Ventures programme. On the east coast, Massachusetts Institute of Technology (MIT) was oversubscribed for its $150m Engine fund run separately to its multi-billion MIT Campaign for a Better World to fund research. Stanford has promised unlimited capital to graduates from its StartX accelerator.
The mix of VCs, governments and universities (let alone corporations) has thrown up plenty of models and combinations (see data review).
Some fund managers, such as Neil Woodford, who runs the UK-listed Woodford Patient Capital investmentvehicle, have committed more than $1bn to private companies with a university research focus, while many US hedge and mutual funds, such as Tiger Global and T Row Price, have focused more on startups generally.
Others, such as Arch Venture Partners, were started at a university before becoming independent, while others, such as Atlas Venture and IvyCap, have close ties to specific academics or institutions. Governments remain keen to use sovereign wealth funds to support tech transfer and university initiatives, with the European Investment Fund one of the largest and the UK’s British Business Bank a cornerstone limited partner in Entrepreneur First’s fund.
