Spin out CEO calls for universities to be better at commercialising IP

UK universities needs to be better at commercialising their IP!

At least that’s the view of the CEO of a university spin-out which recently secured £10m of investment.

David Rajan heads up Opertan, a spin out from the University of Sheffield, which is being described as a ‘game changer’ in the autonomous robotics space.

The company is the first to receive support from Northern Gritstone, the fund led by former Treasury Secretary Lord Jim O’Neil designed to support Northern based innovative companies, but the £10m investment was in fact led by German fund Join Capital.

Rajan sat down with TheBusinessDesk.com to talk about what the future has in store and his views on why Opteran is the exception that proves the rule with regards to UK spin-outs.

“We’re on a trajectory to build an Amazon, Google or Intel of the robotics world,” he said, noting that it’s an exciting time for the Sheffield business, its team as well as its investors.

“It’s a busy space with the likes of Boston Dynamics and what they’ve done – they can build physical machines, but we can be the brains to their brawn.”

He explained what’s really exciting is the “brains” which are being developed are the result of a “fundamentally different approach, different standard of things and has evolved from how nature did it”.

He continued: “We’re pioneering a new approach to enable machines whether on the ground or in the air to move around.

“What’s particularly exciting is we’re not just another AI company gathering tonnes of data and doing statistical pattern matching – there are millions of people doing that right now and they’re all struggling.

“In fact if I was the CEO of one of those businesses I’d be worried about how I create real commercial traction.

“However, from where I’m sitting with Opteran’s fundamentally different approach – we know nature has already solved the problem and that the answers are there.”

He noted that this point of difference is actually the result of a decade of research by Professor James Marshall and Dr Alex Cope to create “brain bio-mimicry which is about understanding intelligence from nature and how a real brain structures algorithms and enables intelligence.”

This research he added has been used to re-engineer an insect brain into software and silicon and take it away from the biological.

Opteran’s technology is so cutting edge it belongs in the ranks of top tech companies in the world, something Rajan says it probably would be if it had been launched in the USA and in particular Silicon Valley rather than Sheffield.

But the Steel City and Yorkshire’s attitude runs through the company’s veins as evidenced by Rajan saying, “Now we’ve got to deliver on what we said we would”.

So is the success of Opteran the birth of a new northern industrial revolution?

Well not according to the CEO who says the business is perhaps more likely the exception that proves the rule that UK universities know how to spin out a business.

“The North has some strengths, but what we’ve got that can drive growth for the future is the universities and these amazing academic minds that come out of them and are creating IP.

“Opteran is world leading and it just so happens to be based in Sheffield. How many other companies could we have like this that are doing things fundamentally different with amazing IP?

“Unfortunately, they’re being set up with poor leadership, universities take too much of a percentage so capital tables are a mess so they can’t get investment, and they’re not commercial.

“The universities don’t understand the problem they’re creating, it’s the old Donald Rumsfeld quote ‘[they] don’t know what [they] don’t know’.”

He added that however it’s not just the universities which are blind to the problem but also the Government who he noted have delivered on a Brexit which has impacted the UK’s GDP.

His solution: “I think the answer is universities. With the UK’s people and population that are bright and clever and can generate IP, why are we killing it on the vine before it gets a chance? It’s an absolute national travesty and a shame!

“We’ve got to sort this out as a country as it’s how we are going to compete in the world, it’s how we’re going to generate revenue and it’s how we’re going to build a society as a lone island.”

So did Rajan consider Opteran disadvantaged by being founded in the North?

“I wouldn’t say we were at a disadvantage because we knew what we needed to do and we went out and did it – it wasn’t like it [being based in the North] was a big hard wall staring us in the face that we had to climb over. That’s the advantage of hiring a commercial team and I think if it was a non commercial team who didn’t know what they were doing it would be a lot harder for them to move a business forward.

“That’s why it’s so important that universities set the companies up properly, because it’s not so easy.”

He added: “So for Opteran it wasn’t that it was hard but I think if we’d been based in [Silicon] Valley it would have been significantly easier, because the investors are there, the money is there, the amount of money they put into start-ups etc, the money can be raised faster and larger which allows you to accelerate your trajectory.

“So, there is an obvious ecosystem advantage to being part of the right geographical location but also I think if we’d been spinning out of Stanford or MIT it would have been a lot easier because they are used to giving 5% away rather than having to fight for the equity position that doesn’t kill the company.”

And does Rajan hope that the success of Opteran provides a path for UK universities to follow?

Smiling, his answer was simple: “Without a doubt yes but I would like to see the lessons learned applied systematically within universities – all of them – because I believe there is a systematic problem not just in the North but across the country.”