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Insights
November 2025
How UK universities are driving deep tech innovation
The UK university sector continues to be a global leader in STEM research, producing groundbreaking technologies and fostering a thriving ecosystem of spinouts. Despite challenging market conditions, the data tells a compelling story of resilience and innovation.
Word-class research driving commercial success
UK universities remain at the forefront of deep tech innovation. Since 2011, more than 2,000 spinouts have emerged from UK institutions, raising £17 billion in equity investment between 2015 and 20241. In 2024 alone, spinouts secured £2.6 billion, a 38% year-on-year increase, bucking the global trend of declining equity investment2.
Leading universities such as Oxford, Cambridge, Imperial, UCL, and Edinburgh rank among Europe’s top 25 institutions for deep tech spinout value. Oxford tops the list, ahead of ETH Zurich in second and the University of Cambridge in third3. Today, the UK boasts 1,337 active deep tech spinouts, with university spin-outs raising over £17bn in equity investment between 2015 and 2024 across 3,788 investment deals1.
Within Foresight’s own technology portfolio of 43 companies, 29 originated from university research, spanning 17 different institutions. Areas of particular strength include photonics, semiconductors, life science instrumentation, and quantum computing - fields where UK universities consistently deliver world-class innovation.
However, technology alone does not guarantee success. As we’ve seen, the calibre of the team is equally critical. Transforming lab-based research into a scalable product requires experienced leadership and operational excellence. While the UK has outstanding business leaders, there is still a need for a deeper pool of entrepreneurs who have scaled businesses to thousands of employees.
Progress in commercialisation: a positive trajectory
UK universities are increasingly recognising that leadership in spinout creation attracts top global talent. Historically, tensions existed between universities seeking large equity stakes and investors prioritising founder incentives for long-term success. Encouragingly, this dynamic is shifting.
Following the publication of USIT guidelines, the average university equity stake dropped from 21.5% in 2023 to 16.1% in 2024. This trend sets companies up for sustainable growth, ensuring founders retain meaningful ownership through multiple funding rounds. Over time, successful founders reinvesting in alumni start-ups will strengthen the ecosystem and inspire future entrepreneurs.
While the US remains a benchmark, the UK has made significant progress and offers a more favourable environment for academic founders than many European countries. The challenge now is to maintain momentum and balance university interests with the long-term success of spinouts.
Improving the path to market
There are several key steps that must be taken in order to accelerate commercialisation:
Standardised equity terms to reduce transaction friction and speed up early-stage investment.
Earlier engagement with industry veterans to validate market potential and pivot technologies toward scalable opportunities. Too often, resources are spent on technologies with limited market viability. Early intervention can prevent costly missteps and redirect capital to high-potential ventures.
A deeper pool of private capital to enable seed investors to realise returns within 3-7 years, rather than being locked in for a decade or more.
Ultimately, customers buy solutions - not technologies. Helping founders understand this early can save years of effort and millions in investment.
Spinouts to watch
Foresight continues to back exceptional university spinouts, including recent investments in Sense.AI (Liverpool) and Spaceflux (Imperial). Mature portfolio companies such as Refeyn (Oxford) and Audioscenic (Southampton) showcase the strength of UK innovation, while successful exits like Codeplay (Edinburgh) and Flusso (Cambridge) highlight the sector’s potential for global impact.
The UK university sector remains a powerhouse of STEM research and commercialisation. With continued progress on equity structures, deeper entrepreneurial talent, and expanded private capital, the UK is well-positioned to lead the next wave of deep tech innovation.
1 Royal Academy of Engineering, 2025
