Half-year analysis: Universities continue moves to venturing

Global University Venturing has collated data from the more than 100 spin-out and start-up deals reported in the first six months (see table overleaf) , and the more than 20 new funds that have been launched to support university commercialisation, both venture and grant based (see funds table) .

Spin-out and start-up deals

It should come as no surprise to anyone who has glanced even casually over spin-out data in recent years that the biggest and most frequent deals are in life sciences. The sector regularly grabs our headlines, with seed and series A rounds that dwarf other sectors’ later-stage investments, and accounted for 36% of our deal news for this year – in comparison, the Spinouts UK 2013 annual report notes that 43% of UK spin-outs are in life sciences. The average for all life sciences deals in the first six months of the year was $12.5m.

Computing-related firms made up the next most active sectors, with software, big data and information and communications technology (ICT) firms taking up 16%, 9% and 7%, respectively. In addition, most of the education-related firms doing deals so far this year fall into the ICT and digital category, and many are geared towards massive open online courses (see Coursera races ahead) .

Despite mounting public pressure – not to mention overwhelming backing from the scientific community – energy and environmental firm deals only made 7% of our deal database for 2013 so far. While enhanced energy technology, such as solar panels and hydrogen-fuelled cars, should arguably be at the forefront of investor’s minds given the threat of climate change or crippling power cuts, the sector only just narrowly beat consumer technologies, such as restaurant finders and fashion accessory spotters, at 5%.

Funds

Global University Venturing has reported on the creation of 22 funds so far this year, 17 of which are venture funds as opposed to grant funds. The largest of these is the $1bn fund for UK-based Invoke Capital, raised by Cambridge University spin-out Autonomy’s co-founder Michael Lynch, who will be one of the keynote speakers at Global University Venturing’s inaugural summit to be held in Brussels, Belgium, on October 16.

Other notable funds include Rock Spring Ventures I, a $79m fund for Scottish life sciences spin-outs, commercialization firm IP Group’s second venture fund for $46m and another $30m raised by its subsidiary Fusion IP, and tech transfer investor Allied Mind’s second fund for $100m in the US.

Identified by Global University Venturing’s technology transfer unit survey of the top 150 institutions from around the world last month, there has been a rise of universityowned venture funds, which are becoming more common as traditional forms of venture capital stray from very early-stage technologies.

In the past six months, Cambridge has begun raising its second Enterprise Fund for $2.2m, while the University of Illinois at Chicago has unveiled the Chancellor’s Innovation Fund with $10m backing. The Global University Venturing survey revealed several top-ranking universities were planning to unveil similar funds over the course of the next academic year.

Working with Global University Venturing

In order to provide our readers with the most comprehensive service possible, it is key for us to have as much interaction with the community as possible.

While our current contacts and newsgathering services tend to provide us with a fair amount of news, we are acutely aware that some activities fall through the cracks without us ever seeing it.

It is therefore crucial that you let us know about your news. We are happy to receive it in any format – phone call, email, press release or even tweet. As long as we get the basics as a starting point, we can pick it up from there.

Send any reports you may have to news editor Gregg Bayes-Brown at gbayesbrown@globaluniversityventuring.com or tweet him @GreggBayesBrown.

Five biggest deals in the first half of 2013

1 Stanford big data analytics spin-out Tableau tops the chart with $254m in its May initial public offering.

2 Education publisher Pearson invested $89.5m in Barnes & Noble’s Nook Media for the firm’s e-reader, picking up a 5% equity stake.

3 Software-as-a-service firm Domo landed $60m in a series B round backed by Cougar Capital, the student-led venture capital unit of Brigham Young University, among others.

4 Caltech start-up Cleave Biosciences, backed by university consortium venture investor Osage University Partners, added $10m to bring its series A total to $54m.

5= Scientific social network ResearchGate raised $35m in a series C round backed by Microsoft co-founder Bill Gates.

5= Also raising $35m, this time in a series A round, was California, Los Angeles, life sciences spin-out Kite Pharma.

5= Fellow University of California institution San Francisco

also posted a $35m series A life sciences deal for Effector Therapeutics.