Cambridge University Challenge Fund (UCF) has made its first realisation.
Successful share realisation for Cambridge University Challenge Fund
The UCF (part of Cambridge Enterprise) has sold a substantial part of its shareholding in Smart Holograms Ltd raising a total of 500,000. This realisation gives the UCF a good return on its original investment made in May 2002.
The sale will provide benefits all round, as Fund Manager Bill Matthews explains, 'We have now released additional funds to enable us to invest in more University start-up companies. But importantly we, and Cambridge University Technical Services still retain a significant shareholding in the business, and so will continue to profit from Smart Holograms future success.'
This particular share realisation is believed to be unique amongst the UK's Challenge Funds: the shares have been sold through an arranged Placing of shares with independent investors rather than through a public offering or trade sale. Porton Capital Ltd (PCL), one of Smart's major investors, and part of the Cambridge Venture Partners group, founded by UCF earlier this year, has managed this procedure.
Smart Holograms, which is developing and commercialising novel hologram sensors for disease diagnostics and management, has recently started a US operation and is working in collaboration with a number of leading Life Science companies.
Dr Frank Craig, CEO at Smart, says, 'It was the Challenge Fund's investment that gave the business a kick-start. This clearly gave us strong leverage and other investor's confidence, and we have since raised over 5 million from further investments. We are pleased that with this latest financial development we will retain strong links with the University.'
Bill Matthews says, 'It is likely that over the coming months we will have further realisation opportunities with several other of our investment companies. This means that we can generate enough income to continue investing in University start-up companies, which in turn we hope will generate more income. We will continue to invest over a broad range of sectors, supporting the University's promising ideas into the commercial world.'
UCF sold its 500,000 stake in Smart Holograms to PCL, an investment management company focusing on the distribution and management of sophisticated investor funds. As such, PCL provides development capital for technology commercialisation entities. 'While we already have a substantial investment in Smart, with the company at the threshold of some large contracts, we feel this was a well-timed purchase,' said Harvey Boulter, Managing Director, PCL.
The Challenge Fund has invested some 3m in 17 new University spin-out businesses that, as the Smart example illustrates, has helped leverage further substantial sums (over 27m) for the growing companies. It has provided support to research projects from a number of sectors including biotech, engineering, wireless communications and health. Amongst the spin-outs that have benefited are Metalysis, DanioLabs, Cambridge Semiconductor, Hypertag and genapta.
University of Cambridge Challenge Fund
UCF provides funding for early stage businesses that have been founded by researchers at the University. It was established in 2000 with start up funds from the University, the Wellcome Trust, the Gatsby Foundation and the Office of Science & Technology. It is part of Cambridge Enterprise, which facilitates the commercial development of the University's intellectual property. Cambridge Enterprise licenses patents and other IP to existing companies, both large and small, as well as to spinouts formed to exploit University technology. Working together with venture capital funds, Cambridge Enterprise forms around five new companies each year.
Cambridge Venture Partners
Established in Spring 2005, CVP comprises the Challenge Fund together with the 3i Group, Amadeus Capital Partners, Avlar BioVentures, IDG Ventures, Porton Capital and TTP Ventures. The aim of CVP is to bring in additional funding to enable a business to develop more quickly and so realise its potential in a shorter time. Once the University's investment has reached its maximum, the Partners would then have the opportunity to lead later investment rounds.
Smart Holograms is an early-stage company that has exclusive rights to the sensor hologram technology invented at Cambridge University by Professor Chris Lowe and his scientific team. To date, Smart has raised 6.5 million in funding from Cambridge University Challenge Fund, Porton Capital and Partnerships UK. The latter Venture Capital firm also has an option to invest a further 1 million. The Company currently has a team of 30 people (including with 15 Ph.D) and has two facilities: in Cambridge (UK) and in San Ramon (USA). It currently has several major partnerships with leading Life Sciences firms for exploitation of its novel sensor hologram technology.
Porton Capital Ltd
Porton Capital Limited (PCL) is a financial management company focusing on the distribution and management of sophisticated investor funds. As such, PCL provides development capital for technology commercialisation entities. Its three primary areas of specialisation are private equity investment management; promotion of technology commercialisation investment funds; and corporate finance advice in relation to technology ventures.
Bill Matthews, University Challenge Fund, 01223 763720 firstname.lastname@example.org
Jane Heeney, Elements PR Tel 01223 421605 email@example.com
Cambridge Enterprise exists to help University of Cambridge inventors, innovators and entrepreneurs make their ideas and concepts more commercially successful for the benefit of society, the UK economy, the inventors and the University.