Oxford, Cambridge and London take two-thirds of spinout capital
A review published by UK Research and Innovation found three cities absorbed most of the venture money going into UK university spinouts. Founders elsewhere are still buying train tickets to London.
Almost half of the UK university spinouts founded between 2013 and 2024 came out of Oxford, Cambridge and London. Those three cities took two-thirds of the venture capital that went into the sector.
The figures come from a review by Tony Hickson, published in February by UK Research and Innovation. Hickson's career was in university technology transfer, investment and startups.
The concentration extends to jobs. Data compiled by Indeed for Bloomberg show the three cities accounted for more than half of the sector's hiring.
The sector itself is not small. More than 2,000 university spinouts have formed in the UK since 2010, with a combined value of about £49bn, most of them in deep tech, according to the Royal Academy of Engineering.
The headline outcomes have also been concentrated. Oxford Nanopore went public at a £3.4bn valuation, and Oxford Ionics and OrganOx were each acquired for more than $1bn last year.
The arithmetic outside the triangle is starker than the funding split alone suggests. Universities in the Northern Accelerator group produced two spinouts in 2018 and 10 in 2025, against roughly 70 a year coming out of Oxford, Cambridge and London.
One of them is METzero, which spun out of Newcastle University in 2024 and has raised about £750,000 in grants. Its technology uses microbes and electrodes to break down sewage, using less energy than pumping oxygen through tanks, and producing ammonia that can be recovered and sold as fertiliser. Thames Water is trialling it.
Pavlina Theodosiou, METzero's chief executive, said Northern Accelerator, a government-funded commercialisation programme founded in 2016, paid for someone to write the business plan. A Royal Academy of Engineering fellowship bought her out of her university contract for a year.
After a pilot in Northumbria, she is trying to raise £1.5m by the end of the year to move the company into its own premises. She is planning three trips to London this month to do it.
The other half of the problem arrives later. Just 36 per cent of spinouts founded between 2013 and 2024 that went public listed in the UK, down from 79 per cent of those founded before 2013.
PsiQuantum, a spinout from the University of Bristol, moved to the US and was valued at $7bn in a fundraising round last year. Exscientia, from the University of Dundee, listed on the Nasdaq in 2021 and merged with Recursion Pharmaceuticals three years later.
The government's Council for Science and Technology puts private startup funding in the US at almost four times the UK level. Above £100m, the gap widens to nine times.
Hickson also blames a "persistent technical literacy gap" among British financiers, which he said is most acute among later-stage investors who lack the scientific expertise to assess complex scale-up ventures.
Ministers were reported by the Financial Times to be considering an exit tax on spinouts moving abroad, then ruled it out. Critics said it would punish successful companies without changing what pushes them out.
Some of the plumbing has improved. The average university equity stake fell to 16 per cent in 2024 from 28 per cent in 2017 after a government review, the Royal Academy of Engineering said, and specialist funds have multiplied, among them Oxford Science Enterprises, which has raised over £800m, and Northern Gritstone, backed by universities in Manchester, Sheffield, Liverpool and Leeds.
For a founder outside the triangle, the practical reading is this: regional programmes can cover the early costs of getting out of the lab, but the cheque that buys premises and a team is still written in London. Budget the travel, and the time it takes, into the raise.