Healthcare and IT companies still dominate the dealflow as we close the first quarter of 2014, during which Global University Venturing recorded 95 deals and 21 new funds linked to supporting university innovation.
In a trend which shows no signs of slowing down any time soon, healthcare deals still account for the lion’s share of university spin-out deals. Healthcare deals represent around a third of all deals reported in the quarter, and also shows encouraging signs in finding that early-stage financing necessary to effective develop technology in this sector.
Evidence of this comes in the form of Juno Therapeutics. Formed in December last year, the collaboration between St Jude Children’s Research Centre, the Fred Hutchinson Cancer Research Centre, and the Memorial Sloan-Kettering Cancer Centre went on to raise $120m to commercialise its oncology therapies. Then in January, Juno added a further $25m to bring its total venture backing to $145m. The reason Juno has attracted so much early attention comes from its chimeric antigen receptors oncology therapies, which essentially instructs the body’s immune system to target cancerous tumours – a process which has shown to completely eradicate cancer previously described as terminal in early trials.
In terms of funds, the Wellcome Trust in the UK leads with the largest fundraise, having established a £200m ($329m) to support healthcare startups and spin-outs in the country. The fund will be managed by Syncona Partners, a subsidiary of the charity investor, and has already begun investments. The fifth largest deal of the quarter, Oxford life sciences spin-out Nightstar, was one of the new funds’ first beneficiaries.
In terms of funds directly supported by university money, both Ohio State University and Singularity University are the stand-outs for Q1. Ohio State provided $50m to Drive Capital’s $250m raise, which will be used to fuel startups in the US Midwest, while Singularity raised $50m to support student startups and faculty spin-outs coming out from the Silicon Valley-based institution.
Other universities raising funds this quarter include the University of New Mexico, Rowan University, the University of Wisconsin system, Kansas University, Louisiana State University, Purdue University, Arizona State University, and Oxford University.
The undisputed king of exits in the quarter has to go to Oxford University’s NaturalMotion. Built on animating software which has become an industry software and used frequently by Rockstar Games, one of the biggest gaming companies in the sector, NaturalMotion went on to use its own software to edge into the increasingly valuable mobile gaming arena. This attracted the attention of Zynga, well known for its Facebook newsfeed-filling game FarmVille, which put up $527m for the spin-out to acquire both its game-driving technology and its popular portfolio of mobile games.
The quarter also saw number of UK floatations, some more successful than others. Imperial College London’s Circassia, which is developing treatments for allergies to cats and pollen, raised $285m in its initial public offering – making it one of the largest UK biotech floats in recent memory. The success was not mirrored by Leeds University’s Xeros, developing washing machine technology which uses practically no water. Despite expectations of raising up to £40m, Xeros came up short at £27.6m.
From an activity standpoint, Stanford University secured the most deals reported in GUV over Q1, closely followed by Cambridge and Oxford.
Box out one: Five biggest deals
- Juno Therapeutics, spun-out by Fred Hutchinson and others to commercialise oncology therapies, raises $145m in series A.
- AqueSys, life sciences spin-out of the University of South California, closed its C round at $43.6m
- IT spin-out AtTask, from Utah University, raises $38m.
- Stanford’s Amprius closes its C at $30m.
- Oxford University’s life sciences firm Nightstar raises $20m.
Box out two: Five largest funds
- Syncona Partners, managing the Wellcome Trust’s evergreen healthcare fund, raises $329m.
- Drive Capital, with $50m from Ohio State University, raises $250m.
- Northleaf Venture Catalyst Fund launches with $100m for early-stage investments into Canadian startups and spin-outs.
- Amadeus Capital secures $54m for UK ICT startups and spin-outs.
- Singularity University launches $50m fund to fuel startups and spin-outs.
Box out three: Five top exits
- NaturalMotion, a gaming company spun-out from Oxford, sells to mobile and social gaming firm Zynga for $527m.
- Circassia, an allergy therapies spin-out of Imperial College London, raises $285m in IPO.
- Fusion IP, a UK commercialisation firm, acquired by IP Group for $116m.
- Horizon Discovery, a spin-out from the University of Cambridge, raises $88m in IPO.
- Lithicon AS, from the Australian National University and University of New South Wales, is acquired for $68m.
Box-out four: Working with GUV on data
While our capacity to capture data has improved since our first year of operations, generating an accurate overview of the biggest spin-out deals, funds for university companies, and other activity which the entire community can use is a two-way street. Our data, as it stands, is not a complete picture, but rather a snapshot. Some news may go under the radar, or can be reported without disclosing figures. For more effective datasets, we call on our readership to provide us with their news and data whenever they have it, and to also disclose as much information as possible on deals and funds for the benefit of the whole innovation community.
Providing us with data couldn’t be easier. Just drop GUV a line at news@globaluniversityventuring.com or tweet us at @GUVenturing.