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8 January 2018

2017: year of change

GUV looks back on the highlights of 2017 and talks to some of the people who have driven the ecosystem forward.

Author: Thierry Heles, editor

2017 has been a year of change – of positive change, for the most part, but also some shocking developments that took the technology transfer world by surprise.

Chief among the latter was the hostile takeover of Touchstone Innovations, the commercialisation firm spun out of Imperial College London, by its peer IP Group. The story began in May and came to a conclusion only in November after months of back and forth between Touchstone’s board – which opposed the deal – and IP Group – which managed slowly but surely to convince enough shareholders until it could force a delisting.

More things are expected to change still. The UK government published its patient capital review consultation in August, calling for a bigger emphasis on generating unicorn companies – those worth at least $1bn – and businesses that grow into large corporates. Global University Venturing took an in-depth look at the government’s startling figures at the time and, while several parts of the consultation were pointing in the right direction, some of the government’s figures did not chime with data collected by GUV – in fact, the discrepancies were significant.

When the government subsequently released its Industrial Strategy document in November, reactions were mixed. For example, John Spindler, chief executive of Capital Enterprise – the umbrella group for universities, incubators and accelerators, non-profits and enterprise agencies in London – presented five points on how the plan could be improved in a guest comment on our sister site Global Government Venturing.

Others were more upbeat. Tony Raven, chief executive of University of Cambridge’s tech transfer office Cambridge Enterprise, told GUV that “it was not just a good year for Cambridge Enterprise, it was also a good year for UK university commercialisation overall”, adding: “in October, the government announced its plan to put science, innovation and its translation at the heart of its industrial strategy. Increased funding for university-based R&D will mean greater opportunities for successful commercialisation. This is good news for us all.”

Indeed, he said: “The 2017 financial year was an excellent year for Cambridge Enterprise. We raised £16.9m ($23m) in operating income from licensing and consultancy, signed 126 commercial and research licences and helped win £13m in translational funding for researchers.

“All told, we supported 1,714 researchers from across University of Cambridge. Our seed funds team made 17 investments totalling £5.2m. Our sister organisation, Cambridge Innovation Capital, committed £41m to investments in University of Cambridge and Cambridge cluster companies.”

The Industrial Strategy document also came as calls for regional university venture funds continued to grow louder – a topic debated at conferences such as UK-based professional association for public sector tech transfer staff PraxisUnico’s annual gathering in June and in a September guest comment from Gregg Bayes-Brown, marketing and communications manager of University of Oxford’s tech transfer arm Oxford University Innovation (OUI) and a former editor of GUV.

And in December, the first steps towards just such a vehicle were revealed when the universities of Aston, Birmingham, Cranfield, Keele, Leicester, Loughborough, Nottingham and Warwick joined forces for a unified intellectual property office – Midlands Innovation – with a view of bolstering the local ecosystem to the point where they can establish a $400m fund.

Midlands Innovation follows existing examples in mainland Europe, where Ghent University, research organisation Vito and the universities of Antwerp and Brussels collaborated in January to establish Qbic II, a $45m multi-university venture fund.

PraxisUnico, incidentally, also experienced a significant change. The association completed its merger with Auril, a professional association of tech transfer staff in the UK and Ireland, in October to form PraxisAuril. It was not the only one to rebrand. Edinburgh Research & Innovation, the tech transfer arm of University of Edinburgh, changed its name to Edinburgh Innovations in August.

Change abounded at the aforementioned OUI, too. Managing director Linda Naylor retired after 15 years of helping the tech transfer arm evolve as one of the true powerhouses in the university venturing ecosystem, growing from some 20 staff to nearly 100.

Naylor was replaced by Adam Stoten, in April, who accepted a promotion from head of technology transfer, life sciences, to the new position of chief operating officer. And in August, Paul Ashley and Brendan Ludden were named new heads of tech transfer at OUI, completing the process of putting a new management in place that began with the recruitment of Matt Perkins as chief executive in October 2016.

The rest of the world did not stand still, of course, and countless tech transfer offices gained new management – here is a selection of some of the most notable changes.

In April, Jay Schrankler was promoted to associate vice-president of technology commercialisation and new ventures at University of Minnesota. Working in its office for technology commercialisation, Schrankler was appointed executive director in 2007, having joined from industrials product manufacturer Honeywell.

Also in April, Jim O’Connell replaced David Day, outgoing director of technology transfer at University of Florida’s office of technology licensing, who stood down after 16 years in the role. O’Connell, formerly the director of tech transfer at University of Miami, was hired as associate vice-president for commercialisation.

In May, Belgium-based life sciences research institute VIB promoted Els Beirnaert to head of new ventures. Beirnaert was previously senior manager of new ventures at the institute, a position she held for more than four years since joining in early 2013.

Yissum, the tech transfer office of Hebrew University, appointed Yaron Daniely as chief executive in June. Daniely had stepped down as CEO at cognitive therapeutics developer Alcobra the previous month before becoming company chairman.

Also in June, the technology development office of Boston University confirmed Mike Pratt as its managing director. Pratt had held the position in an interim capacity since August 2015. His appointment was partly recognition of his instrumental work in refocusing the office’s goals as part of a critical review by the university’s executive.

Jeremy Clay was appointed director of Mississippi State University’s tech transfer office in July. Earlier that same month, Zachary Ellis, formerly manager for external innovation at beverage producer Pepsi, joined Ohio State University as director of new ventures.

Jason Salstrom, who previously led technology commercialisation efforts at University of Southern Indiana, joined Purdue@WestGate, Purdue University’s outlet at WestGate Technology Park in August. Salstrom is in charge of all programs and activities conducted by the university’s entrepreneurship hub Purdue Foundry and the Purdue office of technology commercialisation.

In September, Geisenheim University named Annette Reineke as its new vice-president of research, putting her in charge of tech transfer, research promotion and junior scientific staff with leadership of the PhD board. She replaced Manfred Großmann, who chose to step down from the position after three and a half years.

University venture funds, commercialisation firms and others were also busy hiring new staff.

StartX, the accelerator affiliated with Stanford University, promoted Joseph Huang to chief executive, replacing Cameron Teitelman, in March. Teitelman moved on to chairman of the board, continuing his role on the StartX Fund and initiatives, including founder sourcing and admissions.

In May, US-based commercialisation firm Allied Minds confirmed Jill Smith as chief executive and president, following her appointment in an interim capacity in March when she replaced co-founder and CEO Chris Silva. Smith had been a non-executive director of Allied Minds since January 2016.

Two months later, Smith was joined by Simon Davidson as executive vice-president of technology investments. Davidson was previously a managing director responsible for east coast investments at In-Q-Tel, the investment affiliate of the US intelligence community. He had held that position for more than 10 years.

Uniseed, an Australia-based multi-university venturing fund, appointed tech entrepreneur Natasha Rawlings as an investment manager based in Sydney in October. Rawlings is now responsible for liaising with commercialisation staff at Australian-government owned research agency Commonwealth Scientific and Industrial Research Organisation (Csiro), University of Sydney and University of New South Wales, among other local institutions.

Also in October, University of Texas (UT) System’s commercialisation vehicle Horizon Fund appointed Julie Goonewardene as chief innovation officer. Goonewardene took on the role while continuing as UT System’s associate vice-chancellor for innovation and strategic investment, a position she has held since 2014, as well as chairman of UK-based diagnostics provider Diaceutics.

University System of Maryland (USM) named David Wise as director of its Maryland Momentum Fund, the $25m initiative that supports companies launched from USM’s 12 institutions and its incubators. Wise joined USM at the end of July, having previously been chief executive of vaccine and vaccine delivery technology developer Pharos Biologicals.

And in November, IP Group named several members of its senior executive team to lead operations in Australia, where the firm established a subsidiary in May with a $200m commitment and signed agreements with nine universities across Australia and New Zealand. Mike Molinari was named managing director, working closely with Alistair McCreadie, appointed chief investment officer, Asia Pacific. The team also consists of Peter Grant, managing director for new business and partnerships for IP Group, who was previously appointed chairman of the Australian subsidiary.

Beyond the personnel changes, it was also a good year for university venture funds.

Jim Wilkinson, chief financial officer of Oxford Sciences Innovation, the university venture fund of University of Oxford, said: “Oxford Sciences Innovation has continued to attract investment and now has funds in excess of £600m.

“2017 saw the first series A investments, with Diffblue and Vaccitech the two most significant. The number of investments in the portfolio has continued to expand from 28 to 46. It is expected that 2018 will continue to see an increase in the portfolio and the further development of existing companies primarily through series A investments.”

Change was a theme in some parts of Asia, too. One country that is likely to feature much more prominently in the university venturing world is South Korea, where the government has taken steps towards a range of initiatives and relaxed regulations it hopes will raise the local entrepreneurial spirit.

Hicheon Kim, professor of strategy and organisation and director of the Korea University Business School Startup Institute, took a closer look at these moves for GUV in a guest comment last month and was cautiously optimistic, noting that “it remains to be seen how the university innovation ecosystem will evolve and interact with the existing startup ecosystem”.

One factor that will help South Korea in strengthening its ecosystem will undoubtedly be the partnership between Canada-based commercialisation firm Mars Innovation and South Korea government-affiliated institution Korean Health Industry Development Institute. Despite the early stages of this cooperation, Rafi Hofstein, president and chief executive of Mars Innovation, revealed in a guest comment in June that his organisation had already “been approached by several similar organisations in other countries interested to learn about our business model and possible cooperation”.

This was not the only partnership agreement Mars Innovation signed in 2017. In September, it joined forces with drug discovery company Evotec to establish Lab150, an initiative to drive research translation for projects emerging from Mars’s member institutions. The initiative was modelled on another partnership Evotec entered in 2016 – Lab282, which involves University of Oxford.

Elsewhere in Asia, Kyoto University continued to go from strength to strength. Koji Murota, president and chief executive of Kyoto University Innovation Capital (KU-iCap), the investment firm of Kyoto University, told Global University Venturing that KU-iCap dealt with the largest number of investments by a university VC in Japan in 2017. Looking ahead, he said: “In 2018, we plan to invest in about 10 deals. Our main targets are biotech ventures and materials.”

Kyoto’s successes do not mean others are far behind. UTokyo Innovation Platform, the venture capital arm of University of Tokyo, for example, backed a ¥1bn ($8.9m) first close for the seed stage-focused 360IP Japan Fund 1, which will support technology spinouts from domestic universities and research institutes, in October.

In China, spinouts from Tsinghua University’s incubator X-Lab are set to gain access to $40m in funding from Future Planet Capital, a UK-based innovation platform that aims to secure tie-ups with what it regards as top-tier university programs across Asia, Europe and the US. X-Lab has generated 480 spinouts and supported 1,190 projects since it was launched in 2013. The partnership, signed late last month, will focus on the education, health and security technology sectors.

This was not the only UK-China tie-up last year, or indeed last month: Tsinghua also inked a deal with Imperial College London to seed a $300,000 vehicle – Tsinghua-Imperial Research and Innovation Fund – to back early-stage scientific research. The two institutions have pledged to expand the initiative “significantly” if it proves successful, though a hard cap was not disclosed.

On the other side of Asia, Technion–Israel Institute of Technology unveiled a $200m venture capital fund that will support spinouts and startups emerging from the university, as well as businesses launched by alumni, in June. The fund, whose management will be based in Israel and Hong Kong, is a joint venture between the university’s non-profit subsidiary Technion Research and Development Foundation and UG Capital Management, the venture capital arm of fund management company UGI.

Change, big sums and intriguing initiatives also made headlines in the US. A prime example is the Engine, a program created by Massachusetts Institute of Technology (MIT) in October 2016 to drive commercialisation efforts of research-intensive innovations that have to date been unable to secure the necessary support and resources. The Engine raised a $150m fund in April – with MIT putting in $25m – before growing to $200m in September.

And Lesley Millar-Nicholson, director of MIT’s technology licensing office (TLO), knows a thing or two about change. Giving the opening keynote speech at our GUV:Fusion conference last year, she faced an audience eager to learn what her vision was – she had taken over proceedings at the tech transfer office less than year earlier.

Having had some time to settle into her new job since her appointment and since GUV:Fusion, she said: “The 18 months since my arrival at the helm of MIT technology licensing office has gone like a whirlwind. From the initial six months of listening, observing and gathering data, to the subsequent 12 months of launching new initiatives, refining practices, hiring new staff and actively engaging with our stakeholders we are full steam ahead into 2018.

“Through the collective efforts of a talented and dedicated TLO staff, who were asked to participate in a myriad of change activities, we have managed to achieve so much to date. The following is a sampling – a revamped website, hired for the first time a communications officer who will lead in the development of a TLO communications strategy, we launched our ready-to-sign licences, we have fully adopted an e-disclosure process, we hired a seasoned intellectual property (IP) attorney to lead a revamped patent management team to improve efficiency in our patent filing strategies, we made significant improvements to the professional development support for all staff, and we are in the early planning stages to replace our IP database.

“These and many other activities have occurred while the staff manage the constant stream of new technologies being disclosed by faculty and researchers, just under 800 in 2017, accompanied by the inevitable patent issuances (approximately 300), and licences and options (137), plus endless other tech transfer activities. And all of this alongside our support for the increasingly entrepreneurial research engagements our faculty undertake, such as through the MIT-IBM Watson AI Lab adding to the over $128m of industry funding received by MIT in 2017.

“Lastly, with MIT showing such leadership from the top on initiatives such as the Engine, our 2020 vision for technology transfer is very bright.”

Countless other institutions across the US have also established new funds – ranging from smaller vehicles, such as University of California Riverside’s $10m Highlander Venture Fund, launched in partnership with VC firm Vertical Venture Partners in July, and medium-sized initiatives such as Johns Hopkins University’s and healthcare investment firm Deerfield Management’s $65m commercialisation fund, Bluefield Innovations, established in November and aimed at the university’s therapeutic research, to large programs such as the Pittsburgh Revolution Fund, which is targeting a $200m close to support drug research teams that will form spinouts from University of Pittsburgh, created in June.

What about European universities, often seen as being in desperate need of catching up to their peers in the US? Change is afoot here, too.

Mars Innovation was not the only one to see the Lab282 model and be inspired – in Italy, investment firm Aurora-TT was launched with plans in May to boost the transfer of biotechnology research at universities in the country. To achieve this, the firm is raising a $55m fund from backers such as the European Investment Fund, an EU-owned agency responsible for providing funding to small and medium-sized enterprises. Aurora-TT and its fund marks the first time such an effort is being made in Italy, where technology transfer remains in its infancy. The firm said it had been met with enthusiasm by universities and their tech transfer offices.

It was in Belgium – where nanoelectronics research institute Imec launched early-stage venture capital fund Imec.xpand with a target size of 114m to $136m in June – where news agency Reuters found the most innovative university in Europe in a ranking published in October – KU Leuven.

Paul Van Dun, general manager of KU Leuven’s tech transfer office, said: “We were happy to be ranked, for the second year in a row, as the number-one university in Europe on the Reuters ranking, and number five worldwide. This ranking of the most innovative universities gives an indication of those universities that succeed best in bringing the research results to the market.”

Even beyond this recognition, it was a great year for KU Leuven. Van Dun added: “In 2017 we concluded more than 2,000 new agreements, we were involved in a wide variety of societal relevant issues, from the development of sustainable materials, the reduction of poverty, to a new drug for difficult-to-treat epilepsies that will be launched shortly. Many dozens of millions of euro capital were raised by spinouts from our university.”

The rest of Europe has been busy as well. The government of Austria launched Spin-Off Austria, an $18m initiative that will initially function as a fellowship program to support academics looking to set up spinouts, in September.

Germany’s Federal Ministry of Education and Research’s Innovative Hochschule initiative announced the first batch of universities to receive funding that will support technology transfer efforts in July. A total of 48 institutions out of 118 applicants have been allocated cash and will receive the money over the course of five years beginning this year.

In France, University of Paris-Saclay launched a $53m seed fund in January. The institution remains a project unique in scope and scale both in France and internationally. It unites 18 institutions comprising two universities, nine grandes écoles and seven research organisations, many of which have a long history as autonomous entities.

In Ireland, the Technology Transfer Strengthening Initiative, a program introduced by government-owned export credit agency Enterprise Ireland and managed by Knowledge Transfer Ireland (KTI), received a $37m boost from Enterprise Ireland in January. If figures released by KTI in June are anything to go by, that decision was more than justified – Irish institutions generated 28 new spinouts in 2016.

Finally, down-under also made great strides. Apart from IP Group launching its aforementioned subsidiary in Australia, other projects included University of Melbourne and RMIT University joining a consortium of backers of an incubator and accelerator in the city of Melbourne with $64m in funding in September.

Uniseed, the venture fund backed by four Australian universities and research institute Csiro, announced a $15m fund in March aimed at existing portfolio companies. Melbourne, Sydney, New South Wales and Queensland universities are each set to provide $3.75m to the fund over the next 10 years.

The university venturing ecosystem continues to be largely unaffected by the geopolitical realities of the late 2010s. And the majority of changes that are coming will largely revolve around staying competitive – or marching to the top of the table. But with 2018 being the last year that UK universities are guaranteed to have full access to their European counterparts for research collaboration, it will be interesting to see what, if any, other changes will occur over the coming 12 months.

As always, Global University Venturing will be here to cover it, including at the GUV:Fusion conference – get your ticket by February 9 and pay only £995.

Supporting articles: 2016: year in review

Copyright Mawsonia Limited 2010. Please don´t cut articles from www.globaluniversityventuring.com or the PDF and redistribute by email or post to the web without written permission.

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