The value of university spin-out companies has tripled since 2020, reaching £49 billion, with activity growing beyond the golden triangle, according to a new report.

Spotlight on Spinouts, an annual report by the Royal Academy of Engineering, found that “the UK leads for spinout value creation in Europe”, and while Switzerland leads on a per capita basis, the UK is the leading country in absolute terms.

This was despite a slowdown in venture capital funding in 2025, dropping to £1.3 billion, the lowest since 2021. Last year the UK claimed two of Europe’s six $1 billion (£750 million) exits – both at the University of Oxford, with OrganOx and Oxford Ionics.

The UK hosts five of the top 10 European universities for spin-out value creation, the report highlights with Oxford ranked first in Europe with a combined enterprise value of £13.5 billion.

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This was followed by the University of Cambridge (£10.4 billion) and UCL (£5.5 billion), the University of Bristol (£8.5 billion) and Imperial College London (£3.4 billion) all appeared in the top 10. 

Overall, the UK spin-out companies have created 27,000 jobs, with 70 per cent of these created since 2020.

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The report attributes the boom to post‑2015 companies reaching commercial maturity, strong progression to later funding stages and sustained investment in high-value, deep-tech sectors such as life sciences, AI and quantum. 

Positively, “the UK spinout activity is becoming increasingly distributed, with strong growth beyond the Golden Triangle”, it adds, referring to the traditional dominance of universities in Oxford, Cambridge and London.

The average university equity stake has fallen to its lowest level in the past decade to about 16 per cent. This marks a “significant shift” from the 22-25 per cent typically seen in the period leading up to significant reforms in 2023, which aimed to reduce excessive university stakes and make spin-outs more attractive to investors.

Ana Avaliani, director of enterprise at the Royal Academy of Engineering, said the report highlights that the UK is “world-class at turning research into innovation”.

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But she warned: “We’re still too slow getting ideas out of the lab and into the market. Spin-outs can take 12 to 18 months to launch, and that pace simply doesn’t match the urgency of the opportunity. 

“Universities are starting to shift in the right direction, with reduced equity stakes, but the focus now needs to be on backing the upside and creating the next generation of high-growth companies, not just managing risk.”

Avaliani added that gender gaps still exist within spin-outs. While women were involved in only 7 per cent a decade ago, at least 17 per cent have at least one female founder today. “But that progress has stalled in recent years, and our report shows that 83 per cent of spin-outs still have all-male founding teams.”

Caroline Hargrove, Royal Academy of Engineering Enterprise committee chair, said there are “clear signs of a more mature and geographically diverse ecosystem, with activity extending well beyond the golden triangle”, adding that spin-outs are “increasingly scaling to significant outcomes, outperforming the wider UK tech startup market”.

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“The report also shows that many founders are still navigating complex equity discussions with too little guidance. There is a clear need for fairer benchmarks, greater transparency and more structured support for equity distribution between founding teams throughout the negotiation process,” she added. 

juliette.rowsell@timeshighereducation.com