UCL sets up £50M VC fund to support academic spinouts

University College London (UCL) is getting into the venture capital game. The university, which has spawned a host of biotechs, has rounded up £50 million ($71 million) from the European Investment Fund (EIF) and Imperial Innovations (AIM:IVO) to enable it to financially support spin out companies.

Imperial Innovations CEO Russ Cummings

EIF and Innovations have each chipped in just shy of £25 million to the fund. Albion Ventures, which is running the fund, has also contributed cash. The set up means spinouts from UCL will now have an obvious first stop on their fundraising tours, a resource that will complement the support the university has provided for years through its UCL Business (UCLB) offshoot. In the past three months alone, UCLB has helped Intract Pharma and a pair of gene therapy startups, Freeline Therapeutics and Athena Vision, get off the ground.

Key players behind the fund see it supporting an uptick in the rate at which UCL spins out research, while also boosting the breadth of nonfinancial resources to which the startups have access. "We're planning to bring our expertise and capital to put weight behind UCL's commercialization activities," Innovations CEO Russ Cummings told the Financial Times. "[Our investment] could well become a catalyst for a further £100 million to £200 million to be directly invested in the spinout companies." For Innovations, the fund also secures it an early look at startups to emerge from UCL.

The fund adds to the growing pool of early-stage capital available to academic spinouts in the United Kingdom. Last year, the University of Oxford bolstered the financial prospects of its spinouts by teaming up with Google's ($GOOG) VC wing, Neil Woodford and other prominent investors to create a £300 million fund. The academic funds are the latest milestones in a long-running drive to turn the U.K.'s unarguable scientific expertise into a steady stream of startups, a process that has traditionally been more effective in the U.S.

Now, with the U.K. pushing to establish the Golden Triangle that encompasses Cambridge, London and Oxford as a world-leading biotech hub, the industry knows it cannot afford to fall further behind on the financial front. Cummings sees reasons for optimism. "One reason why the Golden Triangle could rival Boston or Silicon Valley is the presence of corporates," he said.

- read the UCL release
- here's FT's take (sub. req.)
- and Innovations' post