How To Make The Most Of A New £1bn Fund: Life Science’s Scale-Up Challenge

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It might have missed March’s Budget and so was still only a leaked plan when I last wrote, but the U.K. and U.A.E.’s joint sovereign investment partnership for British life sciences is now a reality.

With £1bn to spend – £800m from the U.A.E.’s Mubadala Investment Company and £200m from the U.K. government – the capital will fill something of a gap in the life sciences funding ecosystem. 

For while financial support for R&D is well established, even if it faces challenges, sources of investment to help life sciences start-ups scale and grow independently are harder to come by.

At the risk of making an oversimplified observation, the U.K.’s life sciences sector lacks a large tier of midsized, British domiciled operators. 

There is an exciting army of start-ups at the bottom of the pyramid and at the top sit just a couple of leading global players with U.K. H.Q.s.  

Many of the most promising start-ups get snapped up by bigger players, from both the U.K. and overseas, before realising their full potential for growth and with it further job creation and wider economic benefits for U.K. plc. 

The aim of the fund, which is to encourage firms to scale solo before going public in the U.K., is therefore laudable.  

But it will take more than money to nurture start-ups into scale-ups and beyond (and in all honesty a little more money – though I’ve already said my piece on that matter…)

For one thing, there is something quite unique about the nature of life sciences start-ups in that the idea or innovation is developed independently of the goal of making money. New discoveries can happen on scientific merit rather than because someone’s spotted a gap in the market. 

Efforts to improve the prevalence and quality of translational research – academic and scientific studies that can have clear commercial applications – will support this at source in clinical institutions and universities. 

But we must also appreciate the primary skill sets of those in the life sciences are their abilities as scientists and not as entrepreneurs. While such a generalisation does a great disservice to the successful scientist-entrepreneurs we have in the U.K., it is a characterisation I expect many of my colleagues would accept is true in many cases. 

Promising new firms and their founders can use external support in order to become investment ready. This means building the capacity of their businesses to absorb equity funding and putting to use effectively. 

The variety of support we typically see demand for is as broad as it is long. Professional training for leaders, specific advice and guidance on areas like marketing, sales and HR and, at the outset, corporate finance consultancy to help put pitches for equity investment together. 

On top of this support, we know that being part of a bigger community can help with this process of preparedness too. 

There is a reason why we look to nurture the development and growth of innovation districts in the U.K., because clustering not only helps to magnetise an area for talent and capital. It also creates formal and informal networks of knowledge sharing and business development opportunities. 

After being fairly critical of the U.K.’s Budget last month, I will say that a ‘well done’ is deserved for the tie-up with Mubadala. Hopefully it can grow in size over time after proving its worth. 

It’s now over to industry, trade bodies, support agencies and the funds and developers that operate innovation districts to help mobilise the U.K.’s army of life sciences start-ups to get ready for investment.

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