Plans for £500m Spinouts Fund Developed by London Universities

London’s leading universities are in discussions to create a £500m fund to support start-ups founded by their academics, in the midst of a mounting financial crisis facing the higher education sector. The proposed joint venture, tentatively named London Atrium, involves University College London (UCL), Kings College London, Queen Mary University, and the Francis Crick Institute.

Sources close to the matter have revealed that London Atrium aims to raise at least £500m from third-party investors. If successful, this initiative could help alleviate concerns about the difficulties faced by academic-founded start-ups in the UK when seeking funding. The new entity has been compared to Northern Gritstone, a fund chaired by Lord O’Neill, which has invested in numerous spinouts created by academics from universities in Leeds, Sheffield, Manchester, and other cities.

A search is currently underway for a chair and chief executive to lead London Atrium. In a statement to Sky News, a UCL spokesperson confirmed that the university is exploring options for a successor to its previous Technology Investment Funds, which have supported several successful spinout businesses stemming from its world-renowned research and innovation. They added that these discussions are still in the early stages and that various potential initiatives and partners are being considered.

Sources also revealed that the combined annual research spending of London Atrium’s partners amounts to over £1.4bn, which is comparable to the research spending at top US universities such as MIT and Stanford. UCL alone has a research income of approximately £700m each year and employs over 9,000 academic staff members.

The university’s existing funds have already backed several companies that have gone public, including Autolus and MeiraGTX. It is believed that the strength of London’s academic research community makes it an ideal location for such a venture. The fund is expected to approach British and overseas pension funds for investment.

Furthermore, Imperial College London is reportedly pursuing its own investment vehicle, while Oxford Science Enterprises, founded in 2015, has had a mixed track record despite backing several successful companies.

The launch of London Atrium comes at a time when the financial stability of the UK’s universities is under scrutiny. In an interview with The Sunday Times, the interim head of the universities watchdog expressed concern about the significant funding challenges facing the sector.

Other spinout vehicles have also been established by British universities, including Midlands Mindforge, which is supported by institutions such as Aston, Birmingham, and Nottingham.

The proposed launch of London Atrium highlights the potential of academic research in London and the UK as a whole, and is expected to attract interest from a range of investors.