Endpoints News | Amber Tong 25 Apr 2022
For a world-renowned and storied academic institution with multiple Nobel laureates and top-notch biomedical researchers to boast, the University of Cambridge is behind a disproportionately small number of prominent — not to mention world-leading — life sciences companies.
Cambridge Innovation Capital set out almost nine years ago to change that. The goal was simple: It would take the cutting-edge science coming out of the Cambridge ecosystem, which includes not just the university but also a hospital system and several affiliated research institutions, and provide spinouts with the money, talent and network they need to succeed. Specifically, it aimed to be the preferred Series A investor for any life science companies emerging out of the city (it also invests in deep tech companies).
More than 30 investments later, the firm has enticed some new investors from all corners of the world as it closes a second fund at $300 million (£225 million).
“I think the ecosystem around us is maturing more rapidly or growing more rapidly than we expected,” – Managing Partner Andrew Williamson told Endpoints News.
With around a billion dollars under management, CIC calls itself a classic VC in that it syndicates pretty much every deal. On the other hand, it offers a special gateway into Cambridge-based opportunities. By internal calculations, it’s just passed the $3 billion mark on co-investments.
“We’re starting to operate on some scale,” Williamson said, adding: “The model that we’re increasingly seeing is we’re the local investor who can source and originate some of the most exciting opportunities, typically lead the Series A or late seed round … And then we see investors from all over the world coming in and joining the companies that we’re investing in, co-investing with us particularly in later stage rounds.”
He expects Fund II to maintain a roughly 60/40 split between life sciences and deep tech, deploying up to £25 million for any given company. And while Series A investments will continue to be its bread and butter, CIC does have room for one or two earlier-stage startups every year, usually connected through the business accelerators it started.
CIC has already invested in six companies out of Fund II, including Pretzel Therapeutics, a developer of mitochondrial therapeutics based on science coming, in part, from Cambridge. Another, named Epitopea, just announced its $14 million funding to work on cancer immunotherapeutics targeting tumor-specific antigens.
Robert Tansley, a Partner specializing in life sciences, noted that over the past 10 years there have been significant changes in all the factors that were previously holding Cambridge biotech companies back — capital, management experience and ambition.
“I think also success breeds success,” he said.
He gives the example of Bicycle Therapeutics, which was founded by Greg Winter, the Nobel-winning father of Humira; Centessa, Medicxi’s 10-in-1 biotech; and immunotherapy player F-star Therapeutics, all of whom have jumped across the pond and listed on Nasdaq.
With the US IPO window “effectively closed,” Tansley predicts other VCs will be reserving more money for their private companies while the tech investors and hedge funds that had come in earlier may think twice and retrench from the space, although it will be a while before directly affecting CIC’s own investments.
“The sector, what we may see is that there’s less capital, particularly for the late and growing stage companies,” he said.