Lynch hails Cambridge tech but wants to see more mega valuations

Cambridge entrepreneur Dr MIke Lynch, who founded new Awards sponsor Invoke Capital, has urged local hi-tech and biotech companies not to rest on their laurels but to raise the bar and push for much bigger valuations.

Dr Lynch believes too many businesses in the cluster are in danger of under-achieving unless they go for the burn.

His Autonomy venture was our 2007 Business of the Year and Invoke Capital supports outstanding Cambridge influencers Darktrace, Featurespace and Luminance among a bristling portfolio.

Dr Lynch would also like to see the Cambridge Cluster push its way east along the A14 to the Newmarket area and possibly further to overcome infrastructure issues.

In an exclusive interview supporting the launch of the 2021-2022 Business Weekly Awards, Dr Lynch said: “Cambridge is fantastic as a world-class technology and life science community; it is in a golden era thanks to the University’s brilliant research and greater commercialisation and the emergence of more potential game-changing startups. 

“We are seeing some terrific new startups who are raising bigger amounts earlier than ever. Global investors with deep pockets are charting opportunities in the Cluster in record numbers.

“Cambridge produced some terrific companies earlier in the piece and one thinks of influential organisations such as Acorn, Arm and Sinclair – but these were few and far between and the world has moved on.

“Arm has evolved into a multibillion dollar enterprise and we now need to see more global big-hitters formed and grown in Cambridge. We have the power of the university and a much broader and more sophisticated hinterland to draw from but while our companies do the technology element superbly they often neglect the basic ingredients of sales and marketing in their strategic focus.

“It is simplistic to say that Cambridge has the tech brilliance and MIT the marketing excellence but the general point remains valid. Having outstanding, world-class technology alone is not enough to produce mega companies like Arm.

“One can meet some brilliant technicians in their early 20s who have the technology spot on. The problem comes when you ask them how they are going to optimise their technology; what is the strategy; how do they intend to market and sell the proposition? Where is the virtuous circle?

“I want to see the day when all our brilliant startups have the ambition to go further and grow bigger. We need to see more $2 billion NASDAQ companies.”

Dr Lynch fears there may be a lack of ambition among young Cambridge tech companies; if capital is available then it can only be lack of fire in an entrepreneurial belly which applies the brakes on progress.

He is also aware that there are basic infrastructure problems in Cambridge that can be a barrier to swift physical growth. He argues that you cannot artificially create a cluster of world-class and that it is no accident that they are formed around world-class seats of academic research. But to combat property, transport and other infrastructure problems, Cambridge could push companies along the A14, he argues.

Nevertheless, the main stumbling block that needs to be addressed most urgently is that of entrepreneurs selling out too early, he argues. Dr Lynch cites Darktrace, the world-leading Cambridge cyber security company as a prime example of what ambition allied to well-honed expertise can lead to.

He says the company built brilliant technology from Day One but management also had a clear strategy and knew they had to embrace key issues: Where did the optimum value in the business lie? What needed to be put in place in terms of sales and marketing to max the opportunity? What people talent was in the business that could be nurtured to take the company where it wanted to go?

A superbly judged UK IPO triggered shares surges that at one point recently took the business close to $10 billion market cap.

And much of this upsurge was inspired by Poppy Gustafsson who started out a bit player in accounts but had the ambition and foresight to develop other skills that turned her into a valued executive and a natural leader of and inspiration to colleagues. Now she is CEO; Darktrace is riding high with the aim of going higher.

Dr Lynch believes there may be a whole field of Poppys in Cambridge that could help the cluster blossom faster and flourish.