It’s the time of year when the UK is positioned as a leader in technology.
The government will convene international executives and financiers in November to promote investment opportunities for British companies working on “deep tech” and nuclear fusion. Prime Minister Rishi sunak will also host the first AI Safety Summit to establish the country as a leader on this critical technology.
It’s hard to sell. The UK has few tech companies who can compete globally due to a sluggish economy, the lack of capital markets and the effects of Brexit. Sunak invites primarily executives from Silicon Valley to the upcoming artificial-intelligence summit.
There is one area in which the UK can make a significant impact. The UK’s renowned universities, national health service and startups in the scientific fields of drug discovery, genomics and devices have helped several startups achieve impressive technological leaps and commercial success. The event, which took place on Tuesday in London will feature a number of biotech and healthcare standouts in a series discussions about the UK’s global role when it comes to the most pressing technology questions of today.
Simon Dingemans is a senior advisor with the Carlyle Group, and former chief financial officers at GSK plc. He said that the UK was a very appealing place for life sciences because of the concentration of research institutes, the government’s support, and the variety of investment vehicles. He said that the sector was so vibrant because of this.
Dingemans was appointed chairman of Genomics Plc last year. This biotech company based in Oxford analyzes the genetic risk for a disease. Genomics, which has contracts with MassMutual and several insurance companies, such as MassMutual and other pharmaceutical firms, reached its first “substantial” revenue this year, according to Peter Donnelly, Chief Executive Officer. Peter Donnelly said that his company has raised $82 millions and is planning another round of funding.
Like everywhere else, tech startup funding is declining in the UK. According to PitchBook, venture capitalists have invested £7.9billion ($9.6billion) in the UK during the first six months of the year. This is a drop of 58% from 2022, and lower than the totals for the US and Europe.
PitchBook says that recent investments in UK health care services and devices have shown “the most resilience” when compared to other sectors. McKinsey’s report for 2021 shows that there are more biotech startups in the UK, and venture capital deals as well as initial public offerings. According to the study, the UK is the leader in publishing in this field in relation to its gross domestic product.
The UK’s academic hubs play a key role in attracting scientific talent and ongoing investment for entrepreneurs. Tim Guilliams is a biochemist who founded Healx Ltd., a drug discovery company, at Cambridge University. Isomorphic Labs is one of its main rivals. It’s a spinoff from Google’s DeepMind, which was also born out of a British University.
Even less well-known international schools seed startups. Cerca Magnetics is a startup that produces brain-scanning headgear for children. It was born out of research conducted at the University of Nottingham. According to David Woolger, Chief Executive Officer, the researchers provided an “ongoing pipeline of IP” into the startup.
The academic and public healthcare infrastructure can be a boon for startups but it also has its limitations. British universities were criticized because they took too much equity into fledgling businesses, which could stifle growth opportunities. Woolger stated that Nottingham holds a 25% stake, for instance, in Cerca. However, it is currently in talks to reduce its share.
Many health startups are dependent on selling to the National Health Service , an institution that is facing a growing crisis and has a chequered history when it comes to incorporating new technology. Dingemans said, “It is a remarkable asset as it is a cradle to grave, single-payer system.” It’s difficult to get access to.
Even when a start-up can partner with the NHS, that doesn’t guarantee success. Babylon Health, the British telehealth company , declared bankruptcy in early this year, despite an extensive NHS partnership. Irina Havas, a London-based partner at Atomico Ventures, a venture firm that backs Healx, and other life sciences startups, explained that many companies who cut deals with NHS still need to pursue commercial deals in America in order to grow.
Biotech companies don’t feel as much pressure because they rely less on selling directly to healthcare providers in their locality. These startups face longer timeframes for clinical trials, business deals and difficult lab work.
Investors are attracted to their potential for outsized returns, if they can break into the pharmaceuticals, medical and health systems markets — which are all large global markets. Haivas stated that they are harder to build in the short term. If you build them, they will have a greater uncapped potential.