North East university partnership Northern Accelerator has launched a new £1.7m seed investment fund that aims to grow the region’s economy, building on its successful record of creating innovative spin-out businesses.
The Seed Investment Fund, managed by Northstar Ventures, will complete its first deals in the next two months, and will see further funding allocated over a 12-month period. The fund will make significant investments in businesses with the best commercial ideas and high growth potential in a targeted group of sectors including healthcare, clean technology and data.
Northern Accelerator, comprised of Northumbria, Durham, Newcastle, and Sunderland Universities, translates world-class university research into commercially viable and highly investible businesses. The new fund will provide a much needed cash injection whilst creating a long-term sustainable impact on the region’s economy and job creation.
The number of spin-out businesses from Northern Accelerator has more than doubled over the past year and increased fivefold since the partnership began in 2016. Based on the most recent data, this boosted growth in spin-out company creation has put our partnership universities on a par with the golden triangle universities which are generally considered the leaders in this field.
Backed by funding from Research England’s Connecting Capability Fund and the European Regional Development Fund, Northern Accelerator has transformed the university innovation eco-system, to showcase the best technologies and commercial ideas coming out of North East universities. It has developed a strong pipeline of investible businesses, both in terms of volume and quality. To date the partnership has placed 23 CEOs in spin-outs, created 28 businesses and allocated £1.8m worth of pre-incorporation funding to help 45 research projects move closer to commercialisation.
Northern Accelerator has generated strong investment demand and the seed fund will support highly scalable businesses which will be seeking both initial and further investment. There are plans for the seed investment fund to be the nucleus of a larger venture capital based Northern Universities Fund, which is in the early stages of development.
Translating research into commercial activity is particularly important at a time when the region’s economy is under pressure in the wake of COVID-19.
Professor Andrew Wathey CBE, Vice-Chancellor and Chief Executive of Northumbria University, said: “The launch of the Seed Investment Fund comes at a key time for the North East’s economy and its potential for future growth. Northumbria University’s research volume and quality have grown very substantially in recent years, and through this fund can be harnessed visibly and in new ways for the good of the North East and beyond.”
Recent studies have predicted that the region will be the hardest hit by the COVID-19 economic aftershock whilst experiencing one of the slowest recoveries. Chancellor of the Exchequer Rishi Sunak recently highlighted the vital role research-based start-ups and innovation will have to play in spearheading our economic recovery from the coronavirus, and Northern Accelerator is well-placed to deliver those innovation-led start-ups in the North East.
Alice Frost, Director of Knowledge Exchange at Research England, said: “I very much welcome Northern Accelerator’s launch of a Seed Investment Fund. This is an important step along the way for a vital development in the North East that can increase commercialisation of university research and address the Government’s levelling up agenda. It demonstrates that universities are addressing key challenges in the Government’s R&D roadmap and in COVID19 economic recovery. It also highlights the importance of Research England’s Connecting Capability Fund as a driver for collaboration and success.”
Durham University Vice-Chancellor Professor Stuart Corbridge said: “The launch of the Seed Investment Fund will be a catalyst for change in the North East and builds on four years of success in converting academic innovation into successful enterprises that boost the region’s economy.
“There is a high degree of collaboration between our region’s universities and a wealth of untapped potential demonstrated in a promising pipeline of innovation that builds on our research strengths. The new fund will unlock that potential, not only impacting the economy but also allowing more of our great research and innovation to make a real-world impact.”
Newcastle University Vice-Chancellor and President, Professor Chris Day added: "Our region's universities are converting more and more academic research and innovation into successful businesses. This is helping the economy by creating new highly-skilled jobs and drawing investment to the region. It also helps to move research from our region to make an impact around the world. The launch of the Seed Investment Fund will help to develop more viable businesses and accelerate growth."
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