Thousands of university spinouts at risk over poor levels of support, experts warn
The UK could be missing out on thousands of cutting-edge spinout companies amid a dearth in funding and a shortage in support for founders, experts have warned.
But the figure pales in comparison to the roughly £800m pledged by the Australian government to support startups over ten years, while one Belgian university alone, KU Leuven, receives some 20 million euros (£16.8m) to help spinouts.
Applicants for the first £9m tranche of the UK’s proof-of-concept fund, due to be awarded over the summer, totalled 2,750, some 30 times more than the number of grants available, in signs of the immense difficulty in accessing funding.
‘Huge imbalance’
Researchers at TenU, an organisation representing top universities’ tech transfer teams, have called for the government to expand the national fund that supports academics scaling up their business ideas.
TenU has recommended a bold development of the PoC fund in which public funding is offered alongside support from the business world to test, validate and research markets for their breakthroughs – with investors also brought in to support the application and decision-making process.
Adam Stoten, chair of the TenU working group which issued the recommendations, told City PM: “There’s a very clear argument for injecting more proof of concept funding into the UK innovation ecosystem.
“We still have a huge imbalance between the number of projects coming out of UK university research that is seeking that funding enabling them the reach the point of where they can secure follow on investment and the actual supply of funding which is really very small.
“The need for more is inarguable.”
Stoten also called for more collaboration between universities and the private sector.
“That doesn’t need to be the private sector bringing cash,” he said.
“Just as important and valuable is the in kind contribution they can make in terms of the guidance of initial selection of projects and validating the markets for potential innovations [or] leveraging industry capabilities to do some of the experimental work that’s needed to achieve the proof of concept.”
The research follows the publication of the government-commissioned spinout review in November 2023, which proposed a blue-print for spinout deals, including founder-friendly equity stakes, that speed up and simplify the process of setting up a spinout.
In early 2025 Research England said almost 60 universities had adopted the recommendations.