The Oxford University Innovation Fund (OUIF) IV has just opened its doors to new investors
Bluesky thinking at Oxford...is then nurtured and coaxed into the marketplace
Oxford Today helped the University to announce the first three venture funds launched by Oxford beginning in 2014. This is the fourth. If the previous three are anything to go by, it’ll be oversubscribed in no time, partly because alumni have been core investors.
Fund manager Moray Wright spoke to Oxford Today and reminded us how it works, although nothing stated here is any substitute for reading the official prospectus (www.parkwalkadvisors.com), and not to be construed as advice.
‘There’s a well-acknowledged gap in the market place between a company getting started and receiving second-round funding from a venture capital company. The OUIF funds are designed to plug that gap by providing seed funding at the earliest stage of companies spinning-out Oxford University research.’
He adds as fast as possible that he would have prospective investors know that the fund is ‘high risk.’ It’s also medium to long term – you can’t get your money out on a whim and the investment is designed to play out over 5-8 years.
But in return, you can see your money going into new technologies ranging (typically but not exclusively) across medicine and the sciences, that may prove transformative to society. Imagine if you could say down the road that you helped finance a new penicillin or equivalent of x-ray crystallography, two discoveries associated with Oxford. The implied financial returns of ‘being in’ on the ground floor are obviously there in the mix, as are generous, government-sanctioned tax benefits.
Cycle.Land is one product of the University's Start-up Incubator
Examples of companies invested in so far include Brainomix, specialising in non-invasive diagnostic technologies for neurological illnesses; Orthox, which scores for its mighty clever silk-based cartilage replacement for runners who blew their knees; TheySay, a big-data miner for real-time sentiment assessment (to help a company measure its reputation, for example), and MindFoundry, an algorithm king in the world of machine learning and data analysis.
The other point made by Wright is that the very point at which the Fund decides, in conjunction with the University’s advisor (Oxford University Innovation Limited), to make an investment, it has to some degree already ‘de-risked’ the company. It’s too early to know if it’ll fly, but it has already received an early-stage vindication by the experts who cram the different advisory boards.
In practice with these seed funds, what happens is that the odd rocket falls into the sea, but that it’s balanced by others that successfully make it into orbit.
Wright says, ‘Although the risks associated with very early stage funding are high, this early support plays a critical role in de-risking the opportunity and attracting management and follow-on funding.’
Back in 2014, the first fund was dubbed Isis I but it was quietly changed to OUIF, to avoid any confusion with world events.
Wright says that he is satisfied with the performance of the first three Oxford funds, which to date have grown their net asset value by between 15 and 77% each (tables at http://parkwalkadvisors.com/pw_performance/).
Since the launch of OUIF III, the landscape all around has shifted quickly. Parkwalk, the London, UK-based fund manager for the Oxford funds, was bought by University IP commercialisation specialist IP Group. Wright says that in practice this has meant no change other than greater financial security, partly because of IP Group’s £1.6 billion capitalisation (it’s listed on the FTSE 250).
Meanwhile over in Oxford, the Angels Network (1999), Startup Incubator (2011) and OUIF (2014-) have been complemented most recently in October 2017 by the opening of The Foundry, the first innovation centre devoted to student start-ups. This is where we’re holding out for a Mark Zuckerberg to change the world…
Pictures by Shutterstock, Angelsharp Media and University of Oxford/Richard Lofthouse.
Since 1997, Oxford University Innovation has been responsible for creating spinout companies based on academic research generated within and owned by the University of Oxford, and has spun out a new company every two months on average.
Over £1.5 billion in external investment has been raised by Oxford University Innovation spinouts since 2011, and five are currently listed on London’s AIM market.
The creation of these new spinout companies also channels millions of pounds back into University research, benefits local economic development and has created many new jobs in the region.