The number of UK university spin-outs has fallen as early stage investment declines, according to a new report.

The , detailing 2,269 companies founded or owned by 100 UK higher education providers.

The new figures reveal that 160 unique spin-outs were founded in 2023-24,?down from a peak of 201 in the 2020-21 academic year when the Covid-19 pandemic led to an uptick in activity.

A new report by the Policy Evidence Unit for University Commercialisation and Innovation (UCI) that followed the publication of the register said this decline should be further investigated to understand drivers of change, and be closely monitored in future years.

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It also highlighted a drop in the amount of money invested at an early stage by venture capital (VC), with investment falling to pre-Covid levels.

¡°While this reflects trends in the UK venture capital investment landscape beyond spinouts, it is important to further understand the drivers and consequences of these trends for the development and scaling of spinout companies for the benefit of the UK,¡± the report states.

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Overall, UCI found that more than ?2.8 billion of VC investment was raised by university spin-outs in 2023-24 ¨C which was about 17 per cent of all VC invested into UK companies that year.

And of the 2,000 or so companies reported to the register, 170 have been acquired, and 45 have listed on a stock exchange. A total of 53 have raised more than ?100 million in VC funding and 10 have generated upwards of ?250 million.

UCI¡¯s report showed that spinning out is a ¡°highly concentrated activity¡±, with 20 universities accounting for more than 70 per cent of firms and the largest six institutions producing almost 40 per cent.

But it found that production is becoming less concentrated as a wider group of large research-intensive universities increasingly contribute to spin-out activity and attract early-stage investment.

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¡°A number of factors could be driving these changes, not least an overall maturing of university ecosystems beyond the so-called Golden Triangle of Oxford, Cambridge and London to support spinouts,¡± said the authors.

They also praised proactive investment by funding bodies such as Research England and the introduction of dedicated investment funds such as Northern Gritstone.

Jessica Corner, executive chair for Research England, described Hesa¡¯s new register as a ¡°step-change¡± for the UK¡¯s ability to understand the scale, nature and trajectory of spin-outs.

Writing in the report by UCI, which is funded by Research England, she said, ¡°The register is a novel and world-leading dataset, bringing together consistent company-level data on all UK university spinout companies for the first time.

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¡°It is encouraging to see that while spinout production has historically been concentrated within the largest research universities of the UK, in recent years spinout activity from a wider group of large research intensive universities has grown, and that this expansion appears to be translating into investment success,¡± added Corner.

¡°This suggests positive developments in, and maturation of, these university spinout ecosystems.¡±

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patrick.jack@timeshighereducation.com