UK has a roaring start on exits while healthcare continues to dominate as Global University Venturing reveals its data for 2014 so far.

Over the past six months, Global University Venturing has captured 220 university-linked investment deals and exits along with 47 new funds supporting university innovation – more than double the amount recorded for the same period in 2013.

Data at a glance (Full data available in this month’s magazine):

  • 220 recorded university deals
  • 47 new funds
  • $2.84bn – total dealflow value
  • $3.5bn – total fund value
  • $527m – biggest deal: Oxford’s
  • NaturalMotion acquired by Zynga
  • $620m – biggest fund: GGV Capital V

Before readers get too excited, the sharp increase in dealflow recorded does not unfortunately translate into a 100%-plus increase in investment activity. Rather, the increase in data is largely due to the efforts of the Global University Venturing team to enhance our ability to capture data, and therefore make it a more reliable and valuable pool of information.

 

Deals

The total value of deals recorded by Global University Venturing in the first half of 2014 is $2.84bn, including exits and initial public offerings (IPOs), with the size of many more deals going unreported.

Once again, life sciences makes up the bulk of the deals, making up 41.4% of the total, an increase on our 2013 figure of 36%. Information and communications technologies (ICTs), which collectively made up 32% of our deals in H1 2013, accounted for just 20.5% this year, with industrial and education deals taking up bigger slices of the pie, at 10% and 7.3% during the first half of 2014 respectively.

Of the remaining 20.8%, cleantech, consumer and utilities account for the lion’s share, with a few other deals backing agriculture and direct investments in incubators.

The most active region for deals was the US with 41.4%. The UK claimed 31.8% of all deals – 70 in total. The heavy bias on UK and US deals has not changed much since last year, when together they accounted for 75.5%. Despite little change in the percentage, the increase in deal numbers captured means Global University Venturing is extending its reach beyond the Atlantic connection – 44 deals over last year’s 25. We have also recently appointed reporter Thierry Heles, who has been applying his multilingual talents to gather more news from continental Europe. As the US and the UK are leaders in the field of technology transfer, even as our reach becomes more global, we still expect them to remain the most active regions in our data reports.

Outside the UK and US, Australia and Canada were the two most active tech transfer regions, with the former’s drive towards supporting entrepreneurship and research commercialisation beginning to bear fruit.

The most active university in the first half in terms of securing deals has been Oxford University, which also had the largest deal recorded so far this year. Oxford gaming spin-out NaturalMotion was sold to online gaming firm Zynga for $527m in February, netting over $50m for the university.

 

Funds

Total university-linked funds for this year add up to $3.5bn raised over the six-month period. Of the 47 funds Global University Venturing has recorded this year, Silicon Valley and Shanghai-based GGV Capital tops the list with its fifth fund. Backed by the University of California and University of Texas systems, the venture firm secured $620m to invest in internet and mobile companies, bringing its total under management to $2.2bn. It will be interesting to see whether California returns for a later fund, given that the system recently announced the overturn of a 25-year ban on investing directly in its own spin-outs and startups.

US funds dominate our data, with 61.7% of all funds this year so far. The UK takes up 23.4%, while the remainder is split over a number of different countries. Life sciences is still the biggest focus, but only just, with numerous other funds looking at IT, purely startups, purely spin-outs, education opportunities, or early stage in roughly equal measure.

 

Biggest exits

The UK has dominated exits in this half of the year, with all but one of the year’s largest university exits so far coming from its institutions.

1. Oxford University – NaturalMotion – $527m: NaturalMotion, a gaming spin-out that evolved from providing cutting-edge animation software to the world’s biggest gaming companies to a games developer in its own right, was acquired by gaming firm Zynga for $527m.

2. Edinburgh University – Wolfson Microelectronics – $490m: The Edinburgh spin-out that provides microchips has been acquired by US rival Cirrus Logic after struggling to compete against Qualcomm’s 4G smartphone microchip.

3. Imperial College London – Circassia – $329m: In one of the UK’s biggest IPOs for years. Imperial’s allergy treatment spin-out cleaned up when it went public this year.

4. 2U – $120m: The software-as-a-service provider, partnered by Southern California University, Melbourne University, and Georgetown University, to name a few, raised $120m in its March IPO.

5. Fusion IP – $116m: The de facto tech transfer office for Sheffield and Cardiff universities expanded on its long-term relationship with investor IP Group when the commercialisation firm bought Fusion for $116m.

 

Biggest investments

1. Juno Therapeutics – $176m: A product of three research institutes in the US, Juno Therapeutics made heads spin last year with its $120m series A round in December. The oncology therapeutics firm continues to add to this round, which now stands at $176m

2. Adaptive Biotechnologies – $105m: Another spin-out from the Fred Hutchinson Cancer Research Centre – one of the three behind Juno – Adaptive secured $105m in its series D round in April.

3. InsideSales.com – $100m: Stanford’s sales analytics platform pulled in $100m for its series C round from numerous backers, including Stanford itself.

4. Kite Pharma – $50m: Global University Venturing’s 2013 deal of the year winner Kite Pharma, an immuno-oncology specialist spun out from University of California Los Angeles, makes the list again this year for its $50m pre-IPO venture round. The company raised $128m in its IPO, which falls into the second half of this year.

5. Otonomy – $49m: Backed by Osage University Partners – a consortium of US universities investing in spin-outs and companies backed by university intellectual property – the inner ear therapeutics company netted $49m at the end of April.

 

Largest funds

1. GGV Capital – $620m: For its fifth fund, GGV Capital includes the University of California system among its backers, and welcomes the University of Texas system as a new investor.

2. Qiming Venture Partners – $500m: The China-based early-stage investor launched another fund, targeting earlystage companies. New York University, University of Texas system, Massachusetts Institute of Technology, Pittsburgh and Princeton are among the backers.

3. Syncona Partners – $329m: Launched on the first day of the year, the Wellcome Trust-backed fund is looking to invest primarily in life sciences.

4. Imperial Innovations – $255m: The tech transfer office of Imperial College London continues to build its war chest with the addition of $255m.

5. Joint placing: Arch Venture Partners, Drive Capital – $250m: Both Arch, a spin-out of Chicago University’s tech transfer office, and Drive Capital, which received $50m from Ohio State University, raised $250m this year.

 

Most active universities

1. Oxford University – 11 deals

2. Cambridge University – 10 deals

3. Stanford University – 9 deals

4. Imperial College London – 7 deals

5. University of California Los Angeles – 6 deals

It should be noted
that this table is not a definitive listing of who is the best at technology transfer. Rather, these universities are the best at telling their stories. Getting your TTO’s message out there is not just important from our perspective, it is also essential to capturing business and securing dealflow. We can only go on what we can see, and when a TTO’s press relations or marketing team fails to seek visibility, successes will only ever be confined to the annual report.