Investment Unit of the Year: Allied Minds

The winner of this year’s Global University Venturing Investment Unit of the Year could arguably not have had a more eventful 12 months.

But for Allied Minds to have emerged not just unscathed but even stronger from this turbulent period is a testament to the organisation’s resilience and the strength of its new leadership team.

The London-listed but Boston-based business was set up in 2004 to fund and manage spinouts from universities and federal research facilities in the US. Its initial public offering took place in 2009 and the company managed to create more than 20 spinouts in the life sciences and technology sectors between 2006 and 2017.

Perhaps the most significant change of the past year was the appointment of Jill Smith, a former non-executive director of Allied Minds and former chief executive and president of geospatial imagery provider DigitalGlobe. Smith took the place of former chief executive and Allied Minds co-founder Chris Silva on an interim basis in March 2017, before taking on the role permanently in May.

At the time, Allied Minds’ chairman Peter Dolan welcomed Smith’s appointment, saying: “With her extensive international leadership and operating experience and track record of delivering commercial success, we are confident that Jill brings the right skills to the role at an important point in Allied Minds’ development.”

Dolan added that the company was very grateful to Silva for building Allied Minds into a “key player in IP commercialisation”.

The early part of Smith’s tenure was particularly eventful: in April 2017, Allied Minds announced a root-and-branch strategic review which included a $147m writedown on the value of seven spinouts, which included medical sample preservation firm CryoXtract, cancer treatment developer Novare Pharmaceuticals and mobile security provider Optio Labs.

The decision was taken in order to free up capital at Allied Minds, with an extra $14m expected to be made available for its 2017 operations. Smith said that the measures were “a necessary step in refocusing the company on the areas where we have most potential”.

She added: “While many of the discontinued subsidiaries have demonstrated progress against technical milestones, the path to commercialisation is unlikely to yield appropriate financial returns.”

Following the review, the firm’s half-year results, published in August 2017, showed a loss of more than $58m on revenues of $2m in the first six months of 2017.

As a further significant change of direction, the company’s leadership team was enhanced last summer when Simon Davidson joined as executive vice-president of technology investments from In-Q-Tel, the venture capital affiliate of the US intelligence agencies. Smith said that Davidson would help Allied Minds broaden its investment syndicate and deepen its relationships with its partner research institutions.

At In-Q-Tel, Davidson had played an important role in the development of the organisation’s financing in physical sciences. This included leading investments in sectors ranging from space and air communications, autonomous drones, and low power sensors to physical security and wireless infrastructure.

Despite the turmoil and challenges Allied Minds faced over the course of 2017, it nonetheless managed to pull off some impressive deals as its new strategy began to bear fruit. In September, the company supported a $42m series B round for its subsidiary Federated Wireless, the phone spectrum management specialist based on Virginia Tech research.

Also participating in the round were Woodford Investment Management, Singapore’s sovereign wealth fund GIC and telecoms firm Charter Communications. Federated Wireless’s technology allows carriers to increase the volume of services they can provide while also enabling entry to the mobile phone market at lower cost.

Smith said: “We are absolutely thrilled that Federated Wireless has secured investment and validation from top tier strategic partners who are critical to the roll-out and uptake of the spectrum sharing model.”