Newcastle University marked a record year in 2023 as investments in spin-out across life sciences, sustainable engineering and digital tech totalled over £40m. Created from research discoveries, the University’s 37 active spin-out companies now employ over 300 people.
Spearheading the investment surge is Advanced Electric Machines who completed a £23M fund raising round. The funding will be used to scale up production of sustainable motors for the automotive industry, deliver on ambitious growth plans to establish a global sales footprint, and bolster R&D capabilities. The Series A funding round was led by Legal & General Capital and Barclays Sustainable Impact Capital with significant additional investment from Par Equity. Other investors included Northstar Ventures, the Low Carbon Innovation Fund 2 and Turquoise Capital LLP.
Investment roundup
Aelius Biotech have secured £1.25M from investment house, Mercia. Based at the Newcastle Helix innovation district, the company uses advanced insight to the human gastrointestinal tract to help companies design orally delivered products and therapeutics.
CellRev span-out in 2019. Developed initially around an ability to grow new human corneas, their breakthrough technology is founded on being able to continuously grow, detach and collect adherent cells. Existing investors have added a further £1.05M to the Helix-based company.
XR Therapeutics has attracted £925k from Northstar Ventures and angel investors. The company uses immersive digital technologies to support therapists’ work with patients to overcome anxiety. By combining life-like digital scenes with face-to-face cognitive behavioural therapies, patients are able to learn about and manage their anxiety triggers.
Angel investors and Northstar Ventures are also behind a £635k fund raise for Dragonfly Insulation. Inspired by the flying insect’s wing, the company uses silica aerogels to create fire-resistant lightweight insultation.
Other investments throughout the year have been secured by:
AMLo Biosciences – working with cancer biomarkers to improve patient outcomes
Gitlife – providing proof of ownership and provenance for engineered biological assets
Mignon – developing novel edge, AI chip architecture
ScubaTX – organ preserving technology to increase transplant availability and survivability
Marrabio – design, engineering and construction of bacterial protein polymers
Nunabio – Synthetic DNA production for cutting-edge biotechnology solutions
All together investments across 16 Newcastle University spin outs in 2023 total just over £40m.
Negotiations are also at an advanced stage for two further investments set to be announced in early 2024.
Northern Accelerator spin-out success
Two key enablers of spin-out success are Northern Accelerator and the university’s angel investor group.
Richard Baker, Programme Lead for Northern Accelerator and Director of Economic Development and Commercialisation at Durham University, said: “The investment raised by these spinouts in 2023 demonstrates both the great potential for business creation which exists in North East Universities and the value of the support delivered though the Northern Accelerator programme.
“Our collaboration set out to revolutionise research commercialisation in the North East’s universities and continues to deliver on this ambition. Newcastle University is one of our founder members and supports a strong pipeline of innovative commercial opportunities and it is great to see the confidence that investors have in the high potential and de-risked commercial opportunities spinning out with Northern Accelerator support”.
Angel investor group
Further support comes from an angel investor group formed by Newcastle University earlier this year to provide very early stage pre-seed or seed investments in spin-outs. Two companies have already benefitted from investments from this group.
Newcastle University’s Head of Company Creation, Rick McCordall said: “We’re delighted to see such strong investor confidence in our spin out companies.
“Our goal when developing new companies is to create high-value jobs in the North East of England. To do this we need to bring together world-leading research and discovery with commercial know-how and investor backing.
“I think that the investment successes this year show that we have a strong, investor-friendly approach to ownership and company growth.”
