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Cambridge venture fund now runs $1bn of assets after record raising

Cambridge Innovation Capital has raised its largest round of funding to date as the venture investor seeks to capitalise on the UK city’s growing life sciences and tech economy.

CIC — which benefits from a unique contract with Cambridge university — has raised £225mn to invest in early stage start-ups operating in areas from cell therapies to quantum computing, bringing it to $1bn in assets under management.

Andrew Williamson, managing partner, said Cambridge was reaching a concentration of research and innovation that he had only previously seen when he worked in Silicon Valley.

“Every dinner party you go to, every parent you meet at a kid’s soccer game, they are working in innovation or entrepreneurship or commercialisation,” he said. “It’s reached that critical mass where it’s feeding on itself.”

Williamson added that until recently, the missing piece had been large corporations to provide a talent base and opportunities to partner. But Cambridge’s expertise in artificial intelligence, antibodies, and cell and gene therapies had now attracted both Big Tech and Big Pharma.

“Our offices are on Station Road and I’m looking at Microsoft, Amazon, Samsung and AstraZeneca all on the same street,” he said.

While Oxford showed the world its biomedical prowess by creating a Covid-19 vaccine, Cambridge has had a more mature life sciences ecosystem. Together with London, they form the so-called Golden Triangle cluster.

About half of the investment in the round came from UK funds, with other investors in the US, the Middle East and Asia. Williamson said the firm was attracting more interest from UK investors, despite regulatory hurdles for pension funds such as caps on fees that deter active management, which he hopes will soon be removed.

“We are keeping on at politicians to make sure that gets done this year,” he said. “I think we are going to soon unlock quite a lot more UK pension fund money . . . and that’s likely to start by coming into the later stages, the more de-risked scale-up rounds.” 

VC investment in Cambridge has almost doubled every two years since 2017, according to data platform Beauhurst. In 2021, companies received £1.5bn in funding, £800mn of which went into later stage rounds.

CIC focuses on “series A” funding — companies’ first significant round of venture capital financing — but its limited partners have joined in later rounds for the most successful start-ups.

About half of its investments come directly from intellectual property created by academics at the university. Its contract, which was renewed in 2018 and expires in 2033, allows it to invest alongside the university’s seed fund and gives it the right to participate in future follow-on rounds to scale up the spinouts.

CIC also runs two accelerators to form companies in the life sciences and “deep tech” sectors, such as AI and advanced electronics.

Williamson said a promising area for the city was the nexus between AI and life sciences, such as using machine learning for drug discovery.

“Often the best innovations come at the intersection or cross-fertilisation between sectors and in a university-centric culture like Cambridge, that just happens naturally,” he said. “A professor of AI meets a professor of drug discovery in the pub.”

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