£30m backing to unlock growth for northern university spinouts

British Patient Capital has made a £30m investment into Northern Gritstone, an investment company focused on university spinouts and R&D-intensive businesses across the North of England.

The investment will be used to unlock growth for university spinouts from across the North, including at the universities of Manchester, Leeds, and Sheffield.

British Patient Capital, a commercial subsidiary of the British Business Bank, is the largest domestic investor into UK venture capital and venture growth capital.

The investment, which takes Northern Gritstone’s raise to £245m in ordinary share capital, sits alongside a base that includes M&G and Greater Manchester Pension Fund, with other institutional investors expected to follow later this year.

With a focus on spinouts from the universities of Leeds, Manchester and Sheffield, Northern Gritstone supports the commercialisation of their world-class research.

It aims to catalyse the nascent venture ecosystems around these communities, drawing in further external capital to drive their growth.

While Northern Gritstone will typically invest at seed stage, it has the capability to invest throughout the lifecycle, and into more established businesses at the later stage.

The Northern Gritstone has already invested in innovative businesses from the University of Sheffield, including Iceotope, a global leader in precision immersion cooling technology.

Iceotope’s environmentally efficient technology reduces the energy and water required to cool data centre servers and contributes toward the achievement of net-zero emissions for the data centre industry.

It has also invested in other innovative businesses like Opteran which leverages ground-breaking research to re-engineer insect brain patterns and use them to solve some of the fundamental limitations of artificial intelligence.

Catherine Lewis La Torre, CEO of British Patient Capital, said: “The UK’s university ecosystem is world-leading, and recognised as a hub for break-through research and development.

Duncan Johnson

“Scaling these businesses outside the university spinouts golden triangle is critical, as is energising the venture capital ecosystem in the North of England.

“Northern Gritstone’s mission aligns with British Patient Capital’s to support world-class businesses of the future in the sectors that need patient capital to thrive, and we are excited to work with them on driving this mission forward.”

Duncan Johnson, chief executive at Northern Gritstone, said: “This significant investment from British Patient Capital marks a tremendous achievement for Northern Gritstone as we continue to attract many of the investment world’s most significant players which share our ethos, values and vision as Northern Gritstone shareholders.

“British Patient Capital’s investment is not only a testament to the power of Northern Gritstone’s mission to support science-led spin-outs in the North of England and an endorsement of our ‘profit with purpose’ investment philosophy, but will also strengthen our ability to deliver against these ambitions.”

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