On the side of the angels
The Cambridge business scene is feted internationally for its world-class technology cluster yet its heavyweights on headcount and balance sheet are exclusively industrial.
Johnson Matthey, Anglian Water, Marshall of Cambridge and Domino Printing Sciences would top any pantheon of Cambridgeshire cluster big hitters.
ARM and Autonomy are Cambridge’s largest technology players in world terms but, as ARM CEO Warren East told Business Weekly recently, its entire revenue is dwarfed by Intel’s marketing budget.
Scale is important but it shouldn’t dominate the debate about the worth of a business or the cluster in which it sits. It is pointless to conduct an argument about whether Silicon Fen can be compared to Silicon Valley.
On geographical scale it’s like comparing an elephant to a tapir. But filter the discussion to a question of culture or intellectual capital and the metrics become meaningful.
Serial Cambridge entrepreneur Charles Cotton remembers when in terms of technology products, the city had Acorn and Sinclair Research battling it out and precious little else around.
Now ARM and Autonomy sit on a plateau beckoning CSR to join them. Behind these three, Ubisense’s uplifting IPO – its AIM admission price of 180p had soon shot to 220p and stuck – is a portent of growth to come.
And in quickfire succession two Cambridge pioneers in different spheres – Neul in whitespace and Horizon Discovery in personalised medicines – have shown themselves capable of scaling the same world peak.
When CSR spun out of Cambridge Consultants and floated, Hermann Hauser said that co-founder and software writer James Collier was “a five star wizard – the best there is.”
Collier is back with Neul, with an identifiable, trailblazing product in a vastly lucrative and open wireless market, raising £8m in short order with huge pent-up investor appetite and seems to me to have even more potential than CSR. I’m backing it to be very, very big.
Horizon Discovery meanwhile continues to pack on value like David Haye packs on speed and muscle before a fight that actually matters. Punters with sense should hustle to be in the Horizon corner when it floats in London in 2013. It will be the local BioMedTech cluster’s most valuable float in my view.
Pitch the mature Red Gate Software, Jagex, DisplayLink, Featurespace and others into the mix and add a little seasoning with Ones2Watch like the maturing Plastic Logic, Cognovo, Eight19, Kymab and Bicycle Therapeutics and you have a recipe for sustainability that simply wasn’t evident when Hermann Hauser, Chris Curry and Clive Sinclair were the protagonists in a distinctly lonely landscape.
Pathfinders for the most part need funders, although the exceptional Featurespace has followed Autonomy in making organic growth and self-generating profit its twin temples.
So we must thank God for the angels and their ever-strengthening syndicates; second generation entrepreneurs pumping more and more significant sums into fresh opportunities alone or alongside VCs.
Many of these angel entrepreneurs are emotive in describing their early experiences with VCs, offering a new version of the three Rs – claiming they were rifled, ravaged and ransacked.
“Now we can stand up to them,” says Cambridge angel and Abcam CEO, Jonathan Milner. The adversarial terms and tone are perhaps surprising but reflect bitter experience.
Angels have rushed in where traditional equity providers – regarded as technology fools by Cambridge Cluster stalwarts – have feared to tread. As the angels spread their wings they will fill more and more of the funding void. Still nowhere near enough, but the gap is closing and will continue to do so as the quality proposition gains momentum across the cluster.