Spinout value “continues to flow overseas,” report finds

Investment firm Parkwalk and analytics company Beauhurst have released the latest edition of their report on equity investment into UK university spinouts, with updated data covering the first half of 2026. Overall, it was the second-highest six month period for investment in the last decade, with £1.56bn committed.

However, the report does highlight how value “continues to flow overseas” at the point of exit, with international buyers accounting for 75 per cent of acquisitions in H1 2026. Over the last decade, there have been more American buyers of UK university spinouts than UK buyers:

International investment is described as a strength of the UK spinout ecosystem – the authors argue that the challenge should not be to replace or limit this investment, but to build a stronger UK investor base. Some 86.1 per cent of total investment in the first half of 2026 was internationally-backed (meaning that there was at least one international investor disclosed).

The issue of spinout companies being acquired by overseas investors has become increasingly salient in recent years. The report observes that this does not necessarily mean that a spinout will leave the UK, and it cites the Hickson review’s finding that companies are “most vulnerable to relocation when they are being acquired early in their lifetimes.”

The last few years have seen growing sums invested in UK university spinouts, and the latest data continues the trend:

The report notes that in H1 2026 this was “driven by a small number of large rounds”, with four deals accounting for more than £0.7bn. The number of first-time deals, on the other hand, appears to be falling – a sign, it is suggested, of capital concentrating in existing spinouts:

The regional imbalance seen in previous editions of the report continues – the so-called “golden triangle” of London, the South East and the East of England continue to attract nearly 80 per cent of spinout investment. Scotland’s performance in commercialisation is also highlighted, having attracted £1.73bn since 2016.

Institutional practices

Elsewhere today a new insights paper from the Tony Blair Institute has resumed previous criticisms of the university spinout process, saying that it does “not offer a consistently clear and compelling proposition to founders and investors”:

“Technology-transfer organisations are perceived as taking substantial equity, offering limited visibility over likely terms and requiring lengthy negotiations, with the experience varying significantly depending on the institution.”

The paper worries that while the landscape has improved following the 2023 independent review, the narrative has not. It calls for the government to establish a “small number of technology-sensitive national default terms for university spinout transactions,” reducing the amount of institutional variation. A benchmark university equity stake of five per cent is suggested.

The authors also recommend procurement reforms – citing the recent Research Agenda essay from Geraint Rees and James Coe, it’s suggested that strategic use of advanced market commitments would be a means to strengthen the domestic industrial base over the long term.