UK spinout investment surges to £1.56bn
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22 October 2026 |
UK spinout investment surges to £1.56bn
IP Group plc (LSE: IPO) ("IP Group"), which invests in breakthrough science and technology companies with the potential to create a better future for all, notes that investment in UK university spinouts reached £1.56bn in the first half of 2026, the second-highest half-year total in a decade.
According to a new report from Parkwalk, the Group's EIS fund management operation, and analytics firm Beauhurst, IP Group and Parkwalk remained the most active investors in UK spinouts, with 42 deals over the year to H1 2026. Over the past decade, IP Group and Parkwalk invested in 98 later-stage deals, more than twice as many as the next investor.
First-time equity investment fell from £148m in H1 2025 to £47.0m in H1 2026, a 68.3% drop. The number of first-time deals fell to 44, from a peak of 73 in H1 2021. Average deal size has more than doubled over the decade, from £3.57m to £7.24m. Together, these trends show capital concentrating in established spinouts while fewer new companies secure their first round. Full-year 2025 investment was £1.98bn, down 19.6% on 2024.
Greg Smith, CEO of IP Group, said: "British spinouts are now raising capital at a globally significant level, and international investors have taken notice. That is a real strength, and we should welcome it. But scale-up capital can and must be expanded at home to scale UK innovation. UK pension funds manage trillions of pounds, yet only a fraction reaches our most promising science-based businesses. By backing British science at the growth stage, more of the value created in our universities would stay here, for savers, for the economy and for the country. IP Group has made more later-stage investments in UK spinouts than anyone else over the past decade, and we will go further."
The full release follows:
UK SPINOUT INVESTMENT SURGES TO £1.56BN BUT FUNDING FOR NEW SPINOUTS SHRINKS BY TWO-THIRDS
· UK spinouts raised £1.56bn in H1 2026, the second-highest half-year in a decade
· Quantum and advanced computing lead, taking three of the four largest deals, which together raised £709m in the first half of the year
· First-time investment fell 68.3% year-on-year to £47.0m, putting the pipeline of future spinouts under strain
· Parkwalk calls on the Government to help stabilise EIS, ensuring the next generation of spinouts can access early-stage capital
· Parkwalk and IP Group remain the UK's most active spinout investors, with 42 deals in the past year and 98 later-stage deals over the decade
Investment in UK university spinouts reached £1.56bn in the first half of 2026, the second-highest half-year total in a decade. Funding rose 38.2% compared with H2 2025 and came close to the £1.58bn record reached in H1 2021, according to a new report from Parkwalk, the UK's most active investor in university spinouts, and private company data provider Beauhurst.
The rebound was driven by a small number of large rounds. Four deals accounted for £709m, almost half of all capital raised. Three went to advanced computing companies: Quantum Motion, Oxford Quantum Circuits - both backed by Parkwalk - and Fractile. Oxford Quantum Circuits' £260m round was the largest of the period. Later-stage investment reached £760m, its highest half-year since 2021.
First-time equity investment fell from £148m in H1 2025 to £47.0m in H1 2026, a 68.3% drop. The number of first-time deals fell to 44, from a peak of 73 in H1 2021. Average deal size has more than doubled over the decade, from £3.57m to £7.24m. Together, these trends show capital concentrating in established spinouts while fewer new companies secure their first round. Full-year 2025 investment was £1.98bn, down 19.6% on 2024.
Moray Wright, CEO of Parkwalk, said: "British deeptech is attracting capital at a scale we have rarely seen, and that is something to celebrate. But these figures carry a clear warning. First-time investment has fallen, and the companies vital to the future of the UK economy are struggling to raise their first round. EIS is one of the most effective tools the UK has for backing early-stage science, and the Government should go further. Strengthening and expanding the scheme, with long-term certainty for investors, would unlock more private capital for new spinouts in every part of the country."
International capital remains a major strength of the UK ecosystem. Rounds with at least one international investor accounted for 86.1% of investment in H1 2026, the highest share this decade. That share is then 82.6% of all Later-stage investment since 2016. UK investors remain the backbone of deal activity - they took part in 2,545 deals since 2016, more than six times as many as US investors (408).
At the point of exit, however, value continues to flow overseas. International buyers accounted for 75% of spinout acquisitions in H1 2026, and 68.3% since 2016. US buyers have acquired 66 UK spinouts over the decade, more than UK buyers (57).
UK spinouts are diversifying. Digital and Technologies, which includes AI, quantum, and chips and processors, led sector investment at £1.44bn over the past year. Advanced Manufacturing followed at £1.17bn and Life Sciences at £1.16bn. All three align closely with the Government's Industrial Strategy priorities.
Investment remains heavily concentrated. Since 2016, nearly 80% has gone to the South East, East of England and London. The University of Oxford's spinouts have raised £5.39bn over that period, up on the University of Cambridge's £3.99bn. In the North, Manchester spinouts raised £195m over the decade and Liverpool's £19.6m. Parkwalk's Northern Universities Venture Fund, launched with Northern Gritstone in 2025 and now preparing for a second iteration, targets early-stage spinouts from Leeds, Liverpool, Manchester and Sheffield - aiming to support greater regional capital allocation.
Parkwalk and its parent IP Group were again the most active investors in UK spinouts, with 42 deals over the year to H1 2026, reinforcing their central role in supporting breakthrough innovation. Scottish Enterprise followed with 31 and the British Business Bank with 24. Over the past decade, Parkwalk and IP Group have invested in 98 later-stage deals, more than twice as many as the next investor.
Greg Smith, CEO of IP Group, said: "British spinouts are now raising capital at a globally significant level, and international investors have taken notice. That is a real strength, and we should welcome it. But scale-up capital can and must be expanded at home to scale UK innovation. UK pension funds manage trillions of pounds, yet only a fraction reaches our most promising science-based businesses. By backing British science at the growth stage, more of the value created in our universities would stay here, for savers, for the economy and for the country. IP Group has made more later-stage investments in UK spinouts than anyone else over the past decade, and we will go further."
For more information, please contact:
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IP Group plc |
www.ipgroupplc.com |
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Liz Vaughan-Adams, Communications |
+44 (0) 20 7444 0062/+44 (0) 7967 312125 |
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Portland |
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Lewis Bendall-Craft |
+44 (0) 7931 973950 |
Notes for editors
About IP Group
IP Group accelerates the impact of science for a better future. As the most active UK based, early stage science and technology investor, we develop and support some of the world's most exciting businesses in healthtech, deeptech and cleantech. Including through Parkwalk, the UK's largest growth EIS fund manager, we back world-changing innovation emerging in leading universities and research institutions. Our specialist investment team combines sector expertise with an international approach. Together we have a strong track record of success, having backed high-profile companies including Oxford Nanopore Technologies plc, Hinge Health, Featurespace, First Light Fusion, Hysata, and Oxa. IP Group is listed on the Main Market of the London Stock Exchange under the code IPO.
For more information, please visit our website at www.ipgroupplc.com.
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