Royal Academy of Engineering releases their latest “Spotlight on spinouts” report

2 mins

The Royal Academy of Engineering, in collaboration with Beauhurst, has just published its fifth edition of the annual Spotlight on Spinouts report.

The report shows how spinouts, being ventures that have been set up to exploit University-originating IP,  drive innovation in the UK by transforming research into commercial ventures that fuel economic growth and societal progress.

Against a backdrop of the UK’s wider equity market for high-growth companies facing a 19% decline in investment in 2024, spinouts secured £2.60b in funding—significantly  more than in 2023 – although the total number of deals did drop relative to 2023.  The means that the total value of equity investment from 2015-2024 stands at £17.0 billion.

This rise in funding suggests renewed investor confidence in spinouts, even as broader equity investment declines. AI and life sciences equity markets remained strong, which likely boosted spinouts, as a high proportion operate in these sectors.  

52.5% of spinouts originated from the UK’s top 10 academic institutions, with the Golden Triangle, consisting of Oxford, Cambridge, and London, accounting for 27.7% of the total spinout population. By sector, pharmaceuticals continues to lead the top sectors by number of spinouts in 2025 with 399 companies.

The equity stake taken by universities has faced greater scrutiny over recent years, and so it is perhaps unsurprising that the average stake taken by universities has decreased from 21.5% in 2023 to 16.1% in 2024, the lowest it has been in the past decade.

It will be interesting to follow how the spinout industry continues to change and what new trends may arise throughout 2025.

Written by: Andrew White