Fundraising brings Cambridge venture investor to $1 billion of assets under management

Cambridge Innovation Capital has raised its biggest funding round to date as the venture investor looks to capitalize on the UK city’s growing life sciences and tech economy.

Benefiting from a unique contract with the University of Cambridge, CIC has raised £225m to invest in early-stage startups operating in areas ranging from cell therapies to quantum computing, bringing it to $1 billion in assets under management.

Andrew Williamson, managing partner, said Cambridge was reaching a concentration of research and innovation that he had only seen before when working in Silicon Valley.

“Every dinner party you go to, every parent you meet at a kid’s soccer game, they’re working on innovation, entrepreneurship or marketing,” he said. “He has reached that critical mass where he feeds on himself.”

Williamson added that, until recently, the missing piece was large corporations to provide a talent base and opportunities to partner. But Cambridge’s expertise in artificial intelligence, antibodies, and cell and gene therapies had now attracted both Big Tech and Big Pharma.

“Our offices are on Station Road and I’m looking at Microsoft, Amazon, Samsung and AstraZeneca, all on the same street,” he said.

While Oxford showed the world its biomedical prowess by creating a Covid-19 vaccine, Cambridge has had a more mature life sciences ecosystem. Together with London, they form the so-called Golden Triangle group.

Roughly half of the investment in the round came from UK funds, with other investors in the US, the Middle East and Asia. Williamson said the company was attracting more interest from UK investors, despite regulatory hurdles for pension funds, such as caps on fees that deter active management, which he hopes will be removed soon.

“We’re still talking to politicians to make sure that’s done this year,” he said. “I think we will soon unlock a lot more money from UK pension funds. . . and that is likely to start when you get to the later stages, the more risk-free rounds of expansion.”

Venture capital investment in Cambridge has nearly doubled every two years since 2017, according to the Beauhurst data platform. In 2021, the companies received £1.5bn in funding, of which £800m was earmarked for later stage rounds.

CIC focuses on “series A” funding, the first major round of venture capital funding for companies, but its limited partners have joined in later rounds for more successful startups.

About half of its investments come directly from intellectual property created by academics at the university. His contract, which was renewed in 2018 and expires in 2033, allows him to invest alongside the university’s seed fund and entitles him to participate in future follow-on rounds to scale up spin-offs.

CIC also operates two accelerators to form companies in the life sciences and “deep tech” sectors, such as AI and advanced electronics.

Williamson said one promising area for the city was the nexus between AI and life sciences, such as the use of machine learning for drug discovery.

“Often the best innovations come from the intersection or cross-fertilization between sectors and in a university-centric culture like Cambridge, that happens naturally,” he said. “An AI professor meets a drug discovery professor at the pub.”

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