Oxford tops UK spinout rankings as report signals shift in equity models and investment confidence
Royal Academy of Engineering’s latest report shows record-low university equity stakes, growth in deep tech, and renewed investor activity.
The Royal Academy of Engineering has published its fifth annual Spotlight on Spinouts report, offering a detailed assessment of the UK’s academic spinout ecosystem. Produced in partnership with Beauhurst, the 2025 edition tracks data from over 2,000 spinout companies and highlights key changes in equity distribution, investment, and institutional performance.
The report shows that just ten universities are responsible for 53% of all UK spinouts, with the University of Oxford maintaining its position as the leading origin institution. Oxford has generated 225 spinouts since 2011, 15 more than in last year’s report, and leads in both volume and investment activity. Oxford University Innovation (OUI), the university’s tech transfer office, credits the growth to its research depth, commercial expertise, and established investor networks.
Mairi Gibbs, CEO of Oxford University Innovation, says, “Oxford continues to lead the UK’s spinout ecosystem, and we’re proud of our many successful companies which are delivering real impact from Oxford’s research and expertise along with economic growth for the UK. At Oxford University Innovation, we are committed to supporting world-class innovation and working with partners to ensure spinouts have the infrastructure, funding, and strategic guidance they need to thrive.”
Equity model shifts in response to policy reform
One of the report’s most notable findings is a reduction in the average university equity stake in spinouts. In 2024, university-held stakes fell to 16.1%, down from 21.5% the previous year—the lowest level recorded in a decade. The trend reflects growing alignment with recommendations from the UK government’s Independent Review of University Spinout Companies, published in 2023.
The Review encouraged institutions to adopt more founder-friendly equity models to improve commercialization outcomes and attract private investment. According to the companion paper UK Spinouts – A Status Update, more than 50 institutions have now adopted best practice guidelines, including Oxford, which has also implemented internal programs to improve diversity and founder support.
Paul Taylor, Chair of the Royal Academy of Engineering’s Enterprise Committee, says, “It’s encouraging to see equity stakes reaching a decade low, signaling progress toward a more founder-friendly environment. This aligns with many of the principles we’ve long championed.”
Investment climbs despite broader market caution
While overall equity investment in UK high-growth companies declined by 19% in 2024, spinouts secured £2.6 billion—marking a 38% increase over the previous year. The uptick in capital is notable given the sharp drop in the number of deals, indicating larger average investments and more selective funding behavior.
The report links this renewed confidence to policy changes, sector strength in AI and life sciences, and the expansion of proof-of-concept (POC) funding. In 2024, the UK government announced a five-year £40 million POC fund, with £9 million allocated for 2025. The fund aims to help early-stage spinouts validate research, a key barrier in commercializing university IP.
Despite stronger capital flows, access to affordable lab and office space remains a limiting factor. High-demand clusters such as Oxford and Cambridge face facility shortages that risk slowing spinout progress. The report points to new infrastructure projects like Oxford Science Enterprises’ partnership with the Crown Estate as critical efforts to address this issue.
Sector dominance remains with pharmaceuticals and AI
The life sciences sector continues to dominate spinout activity, with pharmaceuticals leading all categories at 399 spinouts. Oxford alone accounts for 53 pharmaceutical spinouts, followed by Cambridge (38) and University College London (31). These three institutions are at the center of the so-called “Golden Triangle,” a geographic concentration of R&D activity in Oxford, Cambridge, and London.
Data and AI are also expanding rapidly. AI now represents the top emerging sector with 214 spinouts—up from 184 the previous year—driven by increasing applications in diagnostics, materials science, and automation. Oxford’s partnerships with OpenAI and Microsoft were also highlighted in the report for providing researchers with generative AI tools to support healthcare innovation.
Oxford outpaces in gender diversity amid wider imbalance
While female representation among spinout founders remains low nationally, Oxford is outperforming the average. As of January 2025, 24% of Oxford’s spinouts have at least one female founder, compared to a national average of 7.4% for all-female founding teams.
Progress at Oxford is partly attributed to institutional initiatives such as the Increasing Diversity in Enterprising Activities program, which aims to raise female founder representation to 34% by the end of 2025.
Nationally, mixed-gender directorships have increased from 41.8% in 2018 to 60.3% in 2023, showing gradual improvement in leadership diversity. However, all-female director teams still account for just 2.9% of spinouts.
Infrastructure gaps and geographic concentration persist
The report identifies Oxford, Edinburgh, and South Cambridgeshire as the top three local authorities for spinout headquarters. Oxford leads with 110 active spinouts, 91% of which are university-linked. This geographic concentration reflects proximity to research infrastructure, investors, and support services—but also highlights the regional imbalance in the UK spinout economy.
To address this, the Royal Academy of Engineering has expanded its Enterprise Hubs into underrepresented regions including Wales, Scotland, and Northern Ireland. A new hub at the University of Strathclyde is aimed at supporting engineering entrepreneurs in commercializing deep tech innovations.
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