Parkwalk Advisors is lining up investment to fund series C rounds for 10 of its portfolio companies, including spinouts of the universities of Oxford and Cambridge.
Parkwalk Advisors, the fund management arm of commercialisation firm IP Group, is raising a £200m ($260m) fund to make 10 follow-on investments at series C stage, GrowthBusiness reported yesterday.
The vehicle, expected to close in summer 2020, is currently lining up potential LPs including unnamed insurance firms, local authority-owned pension funds and government agencies.
It will invest between $19.5m and $65.1m in 10 existing Parkwalk portfolio companies.
Potential beneficiaries include University of Cambridge spinouts Paragraf and Congenica, specialised in graphene chips and rare disease diagnosis respectively.
University of Oxford-founded electric motor supplier Yasa is another in the frame, having closed its last round in September 2019, which included Parkwalk, at $22m.
Existing Parkwalk funds include the evergreen Opportunities EIS vehicle, which invested $65m in the 2018-19 financial year, as well as spinout co-investment funds launched alongside the universities of Oxford, Cambridge and Bristol.
However Parkwalk believes there remains a shortfall in series C funding, amid research indicating investment in UK spinouts is on the decline.
UK spinouts cumulatively raised $1.7bn in 2019, an annual 9% decrease, despite UK startups more generally hauling in a record £12bn ($15.6bn), according to research conducted by company database provider Beauhurst on behalf of Parkwalk.
Moray Wright, chief executive of Parkwalk Advisors, warned the situation would only prompt overseas companies to move in and acquire more of the UK’s finest emerging technologies.
The country was currently responsible for 16% of the world’s most frequently cited research papers, some 10 to 15 years after its tech transfer sector started down the path of professionalisation, GrowthBusiness said.
Wright told GrowthBusiness: “The UK punches above its weight in blue-sky research and the gap in the UK funding cycle between early investors and institutional investors needs to be filled to prevent lost opportunities for the UK as our technical lead is lost as many companies are sold to better-funded international rivals.”
