Start
Co
Oxford: the investor perspective
Investment opportunities in the region
Funding and retaining innovation
Call to action
Get in touch
Contributors
Sandy Arbuthnot
Investor
Dona Ardeman
Partner
Mills & Reeve LLP
Andrew Bloxham
Managing Director - Ventures
Foresight Group LLP
Chas Bountra
Pro Vice Chancellor - Innovation
University of Oxford
Ben Cartwright
Investment Manager
Beech Tree Private Equity
Michael Collyer
Director
Founders & Funders
Gayle Curry
Partner and HealthTech specialist
Mills & Reeve LLP
Christiaan de Koning
Chair
Founders & Funders
Robert Pinheiro
Senior Business Development Manager
Mills & Reeve LLP
Leo Ringer
Founding Partner
Form Ventures Limited
David Ford
Investor
Cambridge Angels
Zickie Lim
Partner and Head of VC and Investments
Mills & Reeve LLP
Rajat Malhotra Partner
Wren Capital LLP
Peter McLintock
Corporate Partner and Head of Oxford office
Mills & Reeve LLP
Jens Tholstrup
Executive Chairman OION Ltd
Simon Thorpe
Managing Partner Delta2020 LLP
Jim Wilkinson Chief Financial Officer
Oxford Science Enterprises plc
Stephen Windsor
Investor
Mercia Ventures
Adam Workman
Head of Investments
Oxford University Innovation Limited
“In Oxfordshire, we now have arguably the fastest growing innovation ecosystem in the world –enabled by incentives favouring academics, a world leading TTO (OUI), and a large university aligned translation fund (OSE). The region already hosts numerous clusters: life sciences, space and satellite, AI and quantum, motorsport and autonomous vehicles and energy and publishing. In coming years we will attract many more investors and corporates, upskill many more students and early career researchers, engage further our entrepreneurial alums, leverage further the might of unique infrastructures and resources at Harwell and Culham, and the newly established Ellison Institute of Technology. This region will look very different by 2050 – we will be home to hundreds of student led start-ups, many more high value spin-outs and numerous social enterprises. Our aim is to use our talent, networks and brand name to tackle many of the challenges facing our planet, by creating an ‘inclusive innovation ecosystem’ which is benefitting everyone in the region. I will be disappointed if by this date we have not built the first trillion pound company in the UK.”
Professor Chas Bountra
Pro-Vice Chancellor for Innovation, University of Oxford
Oxford:theinvestor perspective
Oxford is an international city that for centuries has been a global centre of learning and innovation. It boasts a world-class knowledge economy supported by an important ecosystem that finds, funds and nurtures high-value businesses. It is a powerhouse for the study and application of life-changing technology in health, energy, space, life sciences, future mobility and quantum computing.
Despite recent economic and political uncertainty, Oxfordshire has continued to accelerate business innovation. It has one of the strongest economies in the UK, generating £23.5 billion GVA annually, achieving an impressive 4% year-on-year growth since 2006.
Funding from Oxford Science Enterprises (OSE) continues to create transformational businesses that are changing the world for the better. It is not alone with a vibrant and engaged Oxford based investor community.
This winning formula has created the highest concentration of science research facilities in Western Europe with some 3,000 high-tech firms in Oxfordshire.
That is why in Autumn 2024, Mills & Reeve brought together investors, founders and individuals representing the University to discuss the Oxford investment landscape, market trends, insights, challenges and opportunities.
This roundtable discussion follows publication of Advanced Oxford’s green paper, “Growing and diversifying the supply of private equity investment into Oxfordshirebased science companies”, which examines the flow of private capital in Oxfordshire.
It identifies 665 science and technology-based companies that have raised investment over ten years from over 3,600 different investors totalling £7.48bn. Over 80% of these companies are not university spin-outs but owe their heritage to alternative enterprise routes.
Investmentopportuni intheregion
Oxford has developed a complex and diverse investment landscape over a relatively short period of time. It is one that covers the entire investment spectrum and with real strengths supporting early stage and fast growth businesses.
Research by Advanced Oxford published in October “Growing and diversifying the supply of private equity investment into Oxfordshire-based science companies” points to over 3,600 different investors, raising £7.48bn, for fast growth technology businesses across Oxfordshire over the last 10 years.
There is no doubt that it is a multifaceted and energised environment.
Yet, as participants in the Mills & Reeve roundtable acknowledged, there is a misperception that it is difficult for investors outside of the region to break into and make investments in businesses in Oxford.
Oxford Science Enterprises (OSE), founded in 2015 with the big ambition to bring “Oxford’s best ideas to the world and solve our greatest challenges at unprecedented speed”, is, investors agreed, both a “curse and a blessing”.
Participants recognise that OSE does give validation to what Oxford is doing. It builds “from the bottom and places more bets,” said an investor. And that “will ultimately produce more winners”.
“The Oxford ecosystem continues to develop, with new entrants and established players looking for high quality dealflow and funding opportunities, both from the university and the broader region. As an active investor across the golden triangle, I’m excited by the potential for enhanced collaboration within Oxford, but also with other ecosystems across the UK, as we can continue to push best practice, sharing capital, talent and ideas to give our start-ups the best possible chance of success at a global level”.
David Ford
Non-Executive Director,
Foresight VCT plc
The OSE conundrum
OSE has without question played a vital role in the Oxford innovation landscape, and the city would be poorer without it. Yet it cannot invest in every opportunity, and that has, unfairly, drawn criticism, particularly from academics that have failed to secure investment from them.
The wider investor community often criticises OSE too, suggesting it will “get the first look” or the “pick of the cream”. But, as investors at the roundtable were reminded, “it is the only investor with 55 people permanently in the city” and that all the money it raises “is put into the city”.
It should also be remembered that OSE operates in quite a different way from other investors. Investors at the Mills & Reeve roundtable were told that “most academics don’t have a clue about creating a company, writing a business plan or even appointing the right CEO”. OSE is having to step into that role, and that requires considerable effort.
It is perhaps because of OSE that Oxford has such a thriving investment community, and with so much IP coming out of the university and the county, its billion pound investment portfolio “is but a drop in the ocean”.
A positive story
The University of Oxford accounts for just 20% of businesses and ideas looking for investment in the city and Oxfordshire, providing considerable opportunity for the investor community.
There are some 3,000 students at the university and thousands more alumni. The university’s alumni are highly mobile and are as likely to start a business or work in senior management roles in the US, Asia or Europe as they are in the UK. The question was asked: ‘how then do we keep them in the city?’
One possible answer is a greater focus on the city’s ecosystem and what investors dubbed the “Three Cs” – Capital, Culture and Community.
Positivity in the city and the region’s storytelling will, investors were told, go a long way. The US, for example, is enormously and continuously positive, and Oxford “needs to be more upbeat about its story – the ecosystem, the investment clusters and the facilities”.
It is, after all, a story that reflects the new Government’s focus on growth. It is a
“Whilst there are a number of established active angel and VC investors in the Oxford region, it needs more “super angels” who have founded, scaled and successfully exited multiple businesses and are recycling money (through angel investment) and expertise and energy (through mentoring or taking on NED or other leadership roles) to support the next crop of growing businesses. Also, some of the most active early stage and growth investors in the UK are not currently active in the region so we need to understand why that is and work out how to address this”.
im and Head of VC and Investments, Reeve
Fundingandretaining innovation
Oxford has a strong, vibrant and structured fundraising community, and one that understands that seed investment involves both “sweat and cash”. It is part of the culture and community of the city where support and advice are often freely given.
OSE “lends its status” to the city, encouraging the Oxford ecosystem by indirectly encouraging all investors to contribute. But to better attract new investors and retain innovation in the city, the entire ecosystem needs to be better at communicating and telling its success story.
There needs to be more positivity, investors agreed, celebrating the amazing facilities and incredible clusters the city and county offers. Better storytelling that recognises the culture of support and community is a powerful tool. It will encourage new investment to support scale-up businesses, keeping Oxford talent in the city.
That storytelling needs to address the myth that still prevails - “if you want to do sciences and engineering you go to Cambridge, and if you want to do arts and humanities you go to Oxford”.
The University of Oxford has taken a lead, changing its mission from research and teaching to research, teaching and innovation. Surveys of its graduates suggest a fifth now wish to explore entrepreneurship rising to more than a quarter of its physical and medical sciences students. The appetite is there, but “patience is very much needed” when working with the university.
Oxford University Innovation, the university’s commercialisation arm, is much more proactive in identifying opportunities. It no longer waits for academics to bring ideas to the table, adopting a proactive stance that engages with students to bring forward ideas.
That proactivity extends also to its alumni. Where once alumni might have been approached to fund a new library, now they might be approached as potential investors or for management roles in spin-out companies.
Its student body, both past and present, is an amazing resource for the university, the city and the investor communities.
Storytelling needs to capture the energy in the city and address the misconception investors outside the city still hold.
“There is massive further potential in Oxford both for investors and founders, but growing a company from seed to exit takes more than cash. OUI and Oxford Science Enterprise cannot be expected to do everything; angel networks, venture builders, funds and service providers will all play a role, and targeted and sophisticated collaboration is needed”.
Ardeman r, Funds Creation and Structuring specialist, Reeve
A lesson from Cambridge
Investors participating in the Mills & Reeve roundtable looked to Oxford’s closest rival, Cambridge, for inspiration and Business Weekly, an independent weekly newspaper that reports and celebrates the business community in the city and county.
It is, one investor suggested, “very good at showcasing the University of Cambridge and its businesses to the wider business community”, with another adding its annual awards bring businesses together. Perhaps Oxford needs something similar?
Finally, delegates raised the need for a strong business school which needs to sit at the heart of the Oxford ecosystem. Participating investors agreed that for whatever reason, Oxford has failed to achieve that. The demise of the Oxford Foundry, an entrepreneurship centre opened by Apple boss Tim Cook, and the temporary hiatus of the Creative Destruction Lab has not helped Oxford’s success story.
The Oxford story is compelling, yet far from over. Where collaboration is prized in building innovation and entrepreneurialism, it is now needed to better tell the Oxford story on the domestic and world stage.
“As one of three Cambridge Angels invited to dinner in Oxford I was delighted to participate in an open, informative and very well chaired discussion about investing in Oxford. There is a perception that Oxford is not open to co-investing and it was good to hear from OSE and OUI that they are keen to change that. There is an old expression in technology “collaborate or die” and I would be delighted to see more co-investment opportunities in Oxford tech and life sciences both from the university and from industry.”
Simon Thorpe Managing Partner, Delta2020
“This county is home to an abundance of talent, knowledge and pioneering spirit and the net result is that we are seeing the emergence of technological and scientific innovation capable of truly changing the world for the better. This needs nurturing and championing, and help comes in a variety of forms, not just money, but also in terms of adding experience, advice, routes to market and the creation of sustainable supply chains. We all need to play our part but the results can be phenomenal and rewarding in so many ways”.
Peter McLintock Corporate Partner and Head of Oxford office, Mills & Reeve
Engage with Oxford Science Enterprises (OSE):
investors are encouraged to collaborate with OSE to support early stage and fast growth businesses in Oxford.
Promote the Oxford ecosystem:
there is a need for better storytelling to highlight the strengths and successes of Oxford's investment clusters and facilities.
Support non-university spin-outs:
investors should recognise and support the significant number of high-tech firms in Oxfordshire that are not university spin-outs.
Foster a culture of innovation:
we call for more "super angels" and active early-stage investors to mentor and support the next generation of growing businesses in Oxford.
Enhance collaboration:
the importance of targeted and sophisticated collaboration between angel networks, venture builders, funds and service providers to nurture and champion technological and scientific innovation cannot be stressed enough.
“It was fascinating to hear investment and innovation leaders share their thoughts on further developing the Oxford ecosystem at a time when there’s so much exciting HealthTech innovation and an appetite to get it to market to improve lives. We’re looking forward to continuing to support the ecosystem to grow and succeed”.
Curry er and HealthTech specialist, & Reeve
Getintouch
For any questions on the topics discussed in the report please get in touch.
Peter McLintock
Corporate Partner and Head of Oxford office, peter.mclintock@mills-reeve.com 07881582349
Zickie Lim Partner and Head of VC and Investments, zickie.lim@mills-reeve.com 07918696303
Dona Ardeman Partner and Head of VC and Investments, dona.ardeman@mills-reeve.com 07570671328
Gayle Curry Partner and HealthTech specialist, gayle.curry@mills-reeve.com 07748927187