A venture capital group backed by Cambridge university has launched a new £100mn fund to invest in start-ups in the region, bolstering the UK government’s plan for higher education institutions to drive more economic growth.
The new opportunities fund from Cambridge Innovation Capital includes significant “anchor” investment from British Patient Capital, a subsidiary of the government-owned British Business Bank, and Aviva Investors.
It is the group’s first fund for bets on so-called scale-ups, relatively advanced start-ups that have proven their business models and are looking to grow rapidly, while its other funds are focused on investing in companies that are in earlier stages of development.
Andrew Williamson, the fund’s managing partner, said its goal was to find “the next DeepMind, the next Arm, the next AstraZeneca — I think we’ve got some of those in our portfolio and this fund will be scaling those up”.
CIC, which has more than £600mn of assets under management, is backed by Cambridge university and has special access to deals coming from the higher education institution. It specialises in investing in companies spun out from university research, particularly in life sciences and “deep tech” — innovations based on fundamental scientific advances.
The new fund has already backed its first two companies — chip designer and manufacturer Pragmatic Semiconductor and quantum group Riverlane, which are both based in Cambridge:
The fundraising comes just weeks after the UK government revived a strategic plan to build up transport and housing between its top two universities, Oxford and Cambridge. Science secretary Peter Kyle said the government wanted to double the economic output of the “Oxford-Cambridge Arc”.
Williamson, who also co-chaired a review of the UK’s university spinouts, said the new fund “aligns beautifully” with the government’s plan. “What the government is doing correctly is looking at where are the most impactful investments,” he said.
Cambridge Innovation Capital is one of a few VC groups seeking to back companies coming out of UK universities.
Other funds seeking to back companies coming out of UK universities include Oxford Science Enterprises, which was founded in 2015; and Northern Gritstone, which is aimed at start-ups from Manchester, Leeds and Sheffield universities.
Northern Gritstone launched in 2021 and raised funds worth over £300mn in 2023. The group is raising funds from new and existing investors with a goal of raising £50mn in further capital, according to a person familiar with the matter. Northern Gritstone declined to comment.
CIC’s Williamson said the new fund aimed to close a financing gap for advanced start-ups in the UK that have trouble finding domestic backers.
“By the time you get to this ‘scale-up’ stage, 80 to 90 per cent of the capital is coming from overseas investors. We welcome the foreign investment but there’s room for domestic funds to participate.”