Backing the future: How IP Group fuels innovation in science and tech | Be Inspired

So IP Group, as you say, we're a very proud constituent of the FTSE 250 and we are an investor that's been backing science and technology businesses for over 20 years. We're actually one of the most active deep tech and science investors in the UK and the most active backer of university spinouts. The common thread amongst those companies is they have some sort of deep tech or hard tech, some sort of intellectual property that underlies their competitive advantage, hence the IP in the name. As a business, we focus on three main areas underneath that deep tech window. Things that we call the digital transformation, that's everything from applied AI to all the backend stuff behind that, future methods of computing, memory or comms, things that will hopefully be less energy intensive than current methods of compute. Secondly, life sciences, so health tech, next generation sequencing, genetic analysis, AI-enabled diagnostics, that sort of thing, and a little bit of therapeutics. And then the third area is clean tech, that's quite broad, ranges from nuclear fusion right the way through to hydrogen fuel cells. And I'm pretty sure that IP Group is probably one of the only listed companies in the world where you can get exposure to breakthrough fusion technology. So you asked a little bit about the history. We sort of pioneered the idea of systematically investing into university spinouts about 20, 25 years ago, and that was through a groundbreaking partnership with Oxford University's chemistry department. Over the last 20 years we've really helped to build a quite vibrant ecosystem here in the UK. We've been founding investors in those now-debt vehicles that invest in Oxford, Cambridge, UCL in London. As the ecosystem has evolved, we strengthened those ties with universities by buying an EIS fund manager called Parkwalk, and through that we have an award-winning opportunities fund, an award-winning EIS fund, and we also manage alumni funds each year for Oxford, Cambridge, Imperial, Bristol, and I'm sure we'll do more. So we've helped build out the ecosystem around this sort of science-based investing in the UK. We see immense potential in these innovative companies and their ability to drive the economy and drive financial returns.

Yeah, I mean, we're very proud to be backers of scientific innovation that's been derived from universities. A lot of that comes from world-class government funded research. We're one of the top places in the world to do that. There's something like 10% of the world's leading IP comes from UK universities. In terms of scale, we've invested about 2 billion pounds into those sorts of companies. That's fueled the creation of about four unicorns now, companies worth a billion dollars or more. And those companies that we've backed have created more than 10,000 jobs, many of those have been very highly paying skilled jobs. So it has a big wide impact for the economy. We've backed more than 500 science-based companies, and they've been across a whole range of scientific innovation. I would say there's been some towards maybe the stranger end of the spectrum. We've had things like a nearly waterless washing machine, we had some inflatable furniture that was based on some IP from NASA amazingly, some nonstick removable chewing gum. Not all of these things work, not necessarily because the tech doesn't work, sometimes it's product market fit, sometimes the tech doesn't work as well as it should, sometimes customer needs change. But there are plenty that have worked really well. I'll pick on a couple to illustrate that. So one, just recently in the last few weeks, we announced our largest cash exit to date, and we sold a business called Feature Space, which was originally a spin out from Cambridge University to Visa, in a fantastic business financially, and they made a great return for our shareholders. It was six times our money, 30% IRR, that sort of thing. We were the first institution to invest in that company back in 2012, and we were the largest shareholder at exit, and our team was on the board of the company through that journey. But what does Feature Space do, what's the impact behind it? It protects payments, billions of them per annum, from fraud, and it applies machine learning to better detect actual instances of fraud and stop them from happening. Fraud is a massive issue. So to have a business that both delivers a great financial return for our shareholders but also can help NatWest customers to improve their detection of fraud by 135% when they put the Feature Space products in place, is what we're all about at IP Group.

The portability of these nanopore sequencing devices is incredible. You just take this device which is the size of a Mars bar and you plug it into a laptop or you can integrate it in an iPad and you can do sequencing in the field anywhere. It enables end users all across the world and in space and down at the bottom of the ocean to be able to read the source code of life. It's come an awful long way since we were the founder investor back in 2005. I think Gordon's spoken about the fact that when he first got involved with the business back in 2005, we spoke to a lot of the traditional VCs about the opportunity, and I think partly because of the way that VC is traditionally done through fixed life funds where you've got five years to invest and five years to realize, it was difficult for a technology that was going to take a number of years to develop commercially to be funded through those vehicles. All of them turned it down. But our permanent capital model at IP Group meant that we could be the founding investor in that business. We were on the board as major shareholder up until the point of IPO, and we were the largest shareholder at the point of IPO. And personally, I'm incredibly proud of the scientific discoveries that are being powered by the nanopore sequencing devices. Over the years we've also helped Nanopore to raise quite a lot of capital through our networks and through funds that we manage. On that point of being able to access expansion capital and get companies in the UK to really reach their potential, that's something where I see a real opportunity. Hopefully companies will follow in Nanopore's footsteps and will float on the London Stock Exchange, they will stay here, they will scale here, and they will deliver their products and services globally. IP Group gives people a way to access a diversified portfolio of these private businesses which is not always easy to access. If you're a pension fund or a long-term pool of capital, you could buy shares in IP Group as one way to get exposure. You could be an investor in our private funds, or commonly co-invest into our growing businesses as they scale. There's a huge opportunity here.