CIC a unicorn in its own right after wooing £1bn investment to Cambridge
Funding powerhouse Cambridge Innovation Capital has now attracted £1 billion of investment into Cambridge companies and managing partner Andrew Williamson has hired more Silicon Valley talent to ensure the technology cluster maintains its upward trajectory on the global stage.
The £1bn funding landmark has come within the last five years of CIC’s six-year existence but Williamson tells Business Weekly that Cambridge can leverage even more international capital as it builds on AI, deep learning, life science and therapeutic market leads.
CIC’s leading position as a gateway to accessing world-leading innovation was underlined by its performance in the six months to the end of September.
CIC has simultaneously unveiled Vin Lingathoti, a 10-year Valley veteran in the deep technology sector, as a partner to focus on enterprise software. Williamson himself spent 20 years in the US technology heartland while investment director Michael Anstey excelled at The Boston Consulting Group’s office in Toronto and has advised multinational healthcare businesses across North America, Europe, India, and Japan.
Williamson said the team was wired to help steer a new wave of growth for the Cambridge technology sector. He said: “The high quality of opportunities afforded to CIC as a result of our preferential access to IP from the University of Cambridge and our superior network through the Cambridge ecosystem ensures we are the gateway for accessing world-leading innovation.”
In the six months under review, CIC invested £22.8 million into three new and 11 existing portfolio companies; Riverlane, Sense Biodetection and PredictImmune joined CIC’s portfolio.
CMR Surgical closed a £195m Series C to commercialise its next-generation surgical robotic system, clinching unicorn status at the same time.
Gyroscope Therapeutics raised £50.4m of Series B funding round including from CIC and lead investor Syncona for the development of gene therapies and surgical delivery systems for retinal diseases.
Cytora closed a £25m Series B financing round to develop its artificial intelligence-powered insurance technology platform and PROWLER.io raised $24m to support product expansion and growth in artificial intelligence decision-making. CIC also figured in prominent deals for Storm Therapeutics, Audio Analytic and Bicycle Therapeutics.
Investing from its £275 million first fund, CIC has injected capital into 29 companies to date. Williamson stressed that international big hitters had invested alongside CIC to accumulate the landmark total.
Thrilled with what he called a show of confidence in Cambridge, Williamson said the local deep technology market was set for further unprecedented growth because the cluster was so uniquely endowed with IP-rich, transformative businesses.
In an exclusive interview with Business Weekly, Williamson said Cambridge gloried in companies creating differentiated technologies. These were prolific, thanks in no small measure to Cambridge University and its exponential success in nurturing and spinning out transformational life science and hi-tech companies.
CIC’s close relationship with the university and follow-up companies is evidenced by the fact that 18 of the 29 businesses in whom it has invested to date are Cambridge University spin-outs.
What is less well known is that the astute and highly forensic CIC team has seen around 1500 investment opportunities to date and engaged closely with around 1000 of those without committing investment. So the portfolio businesses are in an elite minority. The common denominator is that besides having great technology they also have the capability to scale rapidly on a global basis, says Williamson.
This Solomon-esque insight makes CIC more than just another investor and more like an anchor institution within the burgeoning cluster.
Williamson told me: “Not every investment opportunity converts immediately; sometimes we bide our time and look at investments over a number of years: 97 per cent of companies we see we don’t invest in but by engaging with them closely we are able to suggest how they can get themselves investment ready.
“So in addition to capital, we invest a lot of time building relationships. And the model works: The quality and number of high-potential companies is growing year by year. We have acknowledged the reality that some companies may be exceptionally IP rich but take a little bit longer to develop than ventures based on more traditional business models.”
This is where CIC’s globally experienced team comes in once more.
Williamson says: “CIC has a lot of PhDS on its teams with deep tech backgrounds. Every business we invest in is a global business and a significant amount of capital we have invested has been globally secured, so we are seen as a safe pair of hands by investing entrepreneurs and funds across the planet.
“A lot of promising deep tech businesses are too small to build into $1bn businesses as things stand which is why it is vital to incorporate a US, Asian and European growth strategy.
“While all our portfolio businesses tend to have started in Cambridge and developed disruptive Science & Technology within the cluster, many have opened up markets on the West Coast of the US or in Asia, for example.
“We see some ventures that are fantastic in terms of their own specific propositions but because of their business model they remain too small currently to build into a global business. For example, we don’t get involved in consumer related brands - it is just not our model. We and our co-investors require that businesses we back have the ability to scale as rapidly as possible.”
Williamson makes the point that the quality of talent emanating from Cambridge University – principally the calibre of its engineers – is second to none on the worldwide stage.
And the best of our companies – such as CMR Surgical and PROWLER.io – have learned how to attract and retain top global talent by offering stimulating work environments and employment packages that encourage good people to stay and grow with the business.
Williamson says: “In the US engineers can move to new roles almost on an annual basis depending on the packages on offer. In Cambridge, engineers are attracted by the quality of the work, they can become shareholders – personally and professionally they are in a very good place here and they tend to stay loyal to a progressive, switched on employer.
“Swim.ai - which started with commercial operations in San Jose – came to Cambridge because of access to the high quality engineering talent and brainpower available through the university. Their model is sustainable: Swim.ai is already hiring big and filling all their slots.
“Hiring top talent to sustain scalability on an international basis is clearly a challenge for the cream of our technology companies locally but businesses like PROWLER.io, CMR Surgical and Swim.ai provide highly productive workplaces, challenging working environments and great incentives to be part of a business that can transform technology sectors globally.
“The ability of our top life science and technology companies to grow sustainably and consistently recruit top people is possibly the greatest cultural change in the Cambridge science & technology environment in the last 20 years.”
Similarly, while many tech entrepreneurs and investors continue to look to Silicon Valley as an exemplar, Cambridge is no longer a generation behind in terms of maturation compared to the West Coast ecosystem.
“Our own ecosystem now compares favourably,” says Williamson. He praised the energy and growing global influence of Cambridge Enterprise, the university’s commercialisation arm, and the prodigious input of financial and business building expertise from Cambridge Angels.
New executive recruit Vin Lingathoti is a software engineer by training and has held roles across multiple functions including engineering, product management, corporate strategy, private equity and corporate development.
Most recently he was regional head of Venture Investments and Acquisitions at Cisco Europe, where he led multiple direct and fund-of-fund investments and played a vital role in helping Cisco’s executive leadership team develop its European investment strategy.
He says: “The Cambridge cluster has many similarities to Silicon Valley. The University of Cambridge produces some of the best engineering talent in the world, on a par with Stanford and MIT.
“It has one of the most active angel and seed investor communities in the UK and is home to prominent deep tech companies such as PROWLER.io and Riverlane. Many of the global software giants such as Microsoft and Amazon have opened R & D centres in Cambridge in pursuit of hard-to-acquire engineering talent.
“CIC is uniquely positioned to leverage this Cambridge advantage. We have a close relationship with the University of Cambridge and deep connections to the local startup community.
“We have an exceptional team of investment professionals with deep domain expertise and global perspective. All of us have lived in multiple countries and held roles in large corporates and startups and understand the challenges faced by early-stage founders. We take a collaborative approach in helping founders navigate through their journey of building world-class companies.”
Stars in the CIC firmament
Riverlane, where CIC led the £3.3m seed round in which Cambridge Enterprise also participated, is a quantum computing software developer transforming the discovery of new materials and drugs.
Riverlane’s software leverages the capabilities of quantum computers, which operate using the principles of quantum mechanics. In the same way that graphics processing units accelerate machine learning workloads, Riverlane uses quantum computers to accelerate the simulation of quantum systems.
Riverlane is working with leading academics and companies on critical early use cases for its software, such as developing new battery materials and drug treatments. The company will use its seed funding to demonstrate its technology across a range of quantum computing hardware platforms, focused on early adopters in materials design and drug discovery. It will also expand its team of quantum software researchers and computational physicists.
Sense Biodetection, where CIC co-led the £12.3m Series A funding round alongside Earlybird, and which is developing a portfolio of instrument-free, point-of-care molecular diagnostic tests, is pioneering a new class of diagnostic product.
Sense Biodetection plans to invest the new funds in the development and manufacture of a range of tests utilising its novel and proprietary rapid molecular amplification technology, targeting in the first instance infectious disease applications such as influenza.
PredictImmune, in which CIC participated in a £10m Series B round alongside Cambridge Enterprise and other new and existing investors, is developing pioneering prognostic tools for guiding treatment options and improving patient outcomes in immune-mediated diseases. The Series B round cements PredictImmune’s strong financial position, enabling it to build on the successful launch of its first product, PredictSURE IBD™, with a major focus on continued commercial expansion across Europe, the US and other territories.
CMR Surgical closed a £195m Series C funding round, Europe’s largest ever private financing round in the medical technology sector, to commercialise its next-generation surgical robotic system, Versius®.
CIC was an early investor in CMR Surgical having first backed the company’s Series A round in 2016 and has continued to provide financial support and guidance, enabling the realisation of the potential of the Versius® system. CMR Surgical has launched initially in hospitals India with further expansion across the NHS and elsewhere globally expected in short order.
Gyroscope Therapeutics, in which CIC participated in a £50.4m Series B funding round alongside lead investor Syncona, is developing gene therapies and surgical delivery systems for retinal diseases. With this new round Gyroscope Therapeutics will continue to advance: the clinical development of the company’s investigational gene therapy GT005 for dry age related macular degeneration (dry-AMD), the leading cause of permanent vision impairment for people aged 65 and older.
Cytora closed a £25m Series B financing round to continue developing its artificial intelligence-powered insurance technology platform that enables insurers to underwrite more accurately, reduce frictional costs and achieve profitable growth.
Cytora’s underwriting platform applies Machine Learning and Natural Language Processing techniques to public and proprietary data sets, including property construction features, company financials and local weather.
PROWLER.io, where CIC participated in the $24m funding round to support product expansion and growth, continues to define the artificial intelligence decision-making market, developing the world’s first technology that can help businesses and organisations make better decisions in processing dynamic, real-time data in complex and uncertain environments.
Storm Therapeutics closed a £14m extension to its Series A financing, bringing the total Series A financing to £30m. Storm is a drug discovery company that is tackling disease through modulating RNA modifying enzymes.
Audio Analytic, in which CIC participated in a $12m Series B funding round, has has developed cutting-edge AI sound recognition technology which can be embedded into consumer devices to make them more helpful to people, by understanding and reacting to the contextual information provided by sounds.
CIC also participated in Bicycle Therapeutics’ Nasdaq IPO to progress the company’s lead candidate, BT1718, through the clinic and continue to advance its preclinical programmes, including toxin drug conjugates and immune modulators to treat cancer and other debilitating diseases. Bicycle is the first company in CIC’s portfolio to conduct an IPO.