Imperial College Innovation Fund (EIS)
Update (26 June 2020): Offer closed
Please note, this offer has now closed. Any applications already submitted will be processed on a first come, first served basis.
Imperial College is one of the most renowned universities in the world and a global leader in research.
In 1986, the university launched its own dedicated technology transfer office to provide investment support for its academic talent. Since then, hundreds of startups have been formed at Imperial College (more than 200 in the last five years alone) and attracted close to £800 million in external capital and supported the creation of over 1,200 new jobs.
Imperial College is now partnering with spinout-specialist Parkwalk Advisors to launch its first dedicated EIS fund. An exclusive allocation of £500k has been reserved for Wealth Club investors. Wealth Club is the only non-advised broker to offer this.
- Combined portfolio of spinout and startup companies
- Exclusive deal flow from Imperial College
- Aims to offer investors a portfolio of 6-14 companies, not
- Aims to allot within 12-18 months
- Minimum investment £25,000
The fund is managed by Parkwalk Advisors (‘Parkwalk’) and Imperial College Innovations Limited (“ICI”) will act as the investment advisor.
Parkwalk is an experienced and award-winning EIS fund manager. Founded by Alistair Kilgour and Moray Wright, it is the UK’s most active investor in the university spinout sector. The companies in which it has invested have raised over £1 billion in fundraising since 2010. This has been achieved through its relationships with UK Russell Group Universities and increased resourcing after its merger with IP Group, a leading IP commercialisation company, in 2017.
Imperial College Innovations
Imperial College can trace its roots back to 1823 and is one of the world’s top-rated universities, particularly in research and innovation. Like many other institutions, Imperial College founded its own technology transfer office, known as Imperial Innovations, to help convert its most promising research into viable commercial opportunities.
Launched in 1986, Imperial Innovations was originally a department within the university before becoming a wholly owned subsidiary of Imperial College. In 2006 the company listed on AIM and broadened its investment scope to include institutes within the ‘Golden Triangle’, an area comprising London, Oxford, and Cambridge. To better reflect this change in strategy, the company was rebranded as Touchstone Innovations. Touchstone was acquired by IP Group, which retained the investments.
The Technology Transfer Office (TTO) returned to the College in 2019 and was named Imperial College Innovations (ICI). Parkwalk is working with the TTO on this fund.
Currently, ICI is led by Dr Neil Simrick and Dr Brijesh Roy. Dr Simrick is responsible for startup formation while Dr Roy will focus on seed investments. The pair will be supported by ICI’s advisory committee. This committee covers a wide range of skills and experience to help give oversight of the Fund and to complement the knowledge within ICI. The committee includes Brent Hoberman (co-founder of lastminute.com), Dr Iris Good (20 years in entrepreneurship and technology innovation), Dr John Burt (CEO at Medherant) and a number of Imperial professors. Together they will make investment recommendations to Parkwalk.
This is the first iteration of the fund, however, it is expected that Parkwalk will follow a similar investment strategy to its other university funds.
With spinout opportunities, Parkwalk aims to fill a funding gap between early-stage invention funding and later-stage venture capital rounds. Arguably the most important factor for any company under consideration is the strength of its IP as well as a valid market opportunity. Parkwalk will be looking for committed founders it believes can identify clear routes to commercialisation and build teams capable of driving the business.
The fund is expected to cover a range of sectors with an emphasis on Imperial College’s specialities in deep science and technology. ICI will source these deals from its wide network of staff, students and alumni – it is expected that over 100 new ideas will be reviewed each year.
ICI will act as the first point of contact for any prospective companies. Its role will be to review, develop and support opportunities into commercial proposals before presenting them to the investment committees.
Once a company has received investment, it will have access to ICI’s extensive support service. Founders will be assisted with securing IP protection, identifying sources of follow-on funding, as well as use of office space and university resources. Furthermore, companies may also benefit from Parkwalk’s position as the most active investor into UK university spinouts.
The manager has not specified a target return.
Both Parkwalk and Imperial College will assist investee companies with facilitating exit opportunities. Parkwalk seeks to exit investments through trade sales, secondary sales, listing investee companies on AIM (or other appropriate markets) or potential sales to other Parkwalk managed funds but exits are not guaranteed.
It should be noted that an investee company listing will not necessarily constitute an exit, as Parkwalk may elect to continue to hold shares therein rather than selling down part or all of any shareholding.
The intention is to realise investments at an appropriate time after the required three-year minimum holding period. Parkwalk anticipates a target holding period of four to eight years although it could take longer.
As this is a new fund, no investments have been made so far. However, both Parkwalk and ICI have a solid history of investing in spinout opportunities and have already co-invested on six investments through Parkwalk’s Opportunity EIS Fund.
The fund will target a portfolio of 6-14 companies, with deployment expected to take place over 12-18 months, not guaranteed. The portfolio will be split between startup companies and later-stage follow-on investments. This should create a blend of EIS and SEIS-qualifying companies. Although Parkwalk will seek to create a varied portfolio of investments, it will not restrict the amount that can be invested into any one investment or type of investment.
Below are examples of spinouts from Imperial College in which Parkwalk previously invested. They are outlined to give a flavour of the types of companies you might expect but are unlikely to be part of a new investor's portfolio.
Entia aims to simplify the blood testing process. The company, based on proprietary technology developed by Dr Toby Basey-Fisher (founder), was spun out of Imperial College in 2015.
The technology is targeted at people suffering from anaemia, a condition defined by low red blood cell count. Anaemia is one of the most common conditions, affecting more than 1 billion people worldwide. However, despite its prevalence, it often goes undiagnosed due to its relatively subtle symptoms.
As a solution, Entia has developed Affinity, a take-home kit which only requires a single drop of blood. The device can quickly and accurately measure haemoglobin levels, allowing patients to effectively “have the laboratory in the palm of their hand”.
The company has progressed quickly, moving from idea to a pre-manufacturing prototype in just two years with its next step being to fully commercialise the product. In total, the company has received just under £2 million in non-dilutive grants, including £1.14 million from Innovate UK.
A spinout from Imperial College’s Engineering Department, Inflowmatix allows utility companies to continuously monitor, diagnose and manage water networks.
The company was launched by a multi-disciplinary team to address the growing instability of water infrastructure. Many hydraulic systems have become outdated leading to bursts, leakage and hikes in operating costs. Inflowmatix’s technology uses high-frequency pressure sensors and data platforms to provide users with real-time data on the operational efficiency of their networks. Since first commercialising its technology in 2017, the company has gained more than 40 customers globally.
In 2015, Imperial Innovations provided £1 million in seed funding to assist with the continued development of the company’s existing prototypes. Parkwalk invested a year later in a joint £3 million funding round before providing £2.5 million in follow-on funding in 2018.
Ceres Power (example of previous exit)
Ceres Power was a co-investment between ICI and Parkwalk. it has been included as an exit example because the investment was made using broadly the same mandate as this fund.
Ceres Power spun out of Imperial College over 19 years ago and has subsequently gone on to become the UK’s most valuable cleantech company, valued at over £600 million (January 2020).
The company has developed fuel cells, a type of device that produces electricity from substances such as natural gas and hydrogen, with relatively low or zero carbon emissions. Where Ceres differentiates itself is its unique combination of advanced materials which provides high levels of efficiency at a lower cost. Furthermore, the flexibility of the design means the cells can be used industrially, domestically and within vehicles.
Parkwalk first invested in October 2016 as part of a £20 million funding round to help the company make substantial commercial and technical progress. In just over three years, the company was exited generating a return of 2.4x for Parkwalk investors (not including initial tax relief).
OxSyBio Limited (example of previous failure)
As this is a new fund, there have been no failures so far. However, ICI and Parkwalk have both made a significant number of previous spinout investments and not all will have been successful. One such example is OxSyBio, however, please note that the company was a Parkwalk investment, ICI was not involved in the deal.
OxSyBio was a novel synthetic biology company, in which Parkwalk invested in February 2018. The company was developing 3D printing tools for drug discovery and diagnosis, based on research conducted by Professor Hagan Bayley at the Chemistry Department at the University of Oxford and co-founder of Oxford Nanopore, the successful UK-based DNA sequencing company.
OxSyBio raised substantial funding from a group of institutional investors including Parkwalk, which was a minority investor. The funding round had several ‘hard’ targets to achieve to enable the next tranche to be funded. Unfortunately, the targets were not met and investors did not continue to support the company.
There is no performance data for the fund yet. However, the graph below shows historic performance to 6 January 2019 across all investments made through all Parkwalk EIS funds per tax year (this includes the other three university funds). Please note, “Realised Return” figures include loss relief at 45% so cannot be directly compare to other EIS offers on this website: remember tax rules can change and benefits depend on circumstances.
Source: Parkwalk, valuations as at 6 January 2020, based on Parkwalk’s valuation methodology. Past performance is not a guide to future performance. Performance figures show the average returns for investors investing in each tax year. Realised Return refers to cash returned to investors per £ invested (including loss relief where applicable for a 45% income taxpayer) before fees. Unrealised Return is the value of the balance of the portfolio including potential earn-outs on exits. Total Return is the sum of realised and unrealised returns excluding fees and initial income tax relief. Please note, the performance figures also exclude any performance fees (20% above £1 returned to investors). Performance data for 2019/20 is not yet available.
Risks – important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
EIS investments are high risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
Tax rules can change and benefits depend on circumstances.
This EIS fund invests in early-stage businesses which are more likely to fail than larger ones, so you should expect a number of failures in the portfolio.
A summary of the main charges and savings is shown below. Some of these will be payable by the investor, whilst others by the investee companies. The investment may have additional charges and expenses: please see the provider documents, including the Key Information Document, for more details.
|Full initial charge||5%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||5%||Annual management charge||1.5%|
|Performance fee||20%||Investee company charges|
|Initial charge||—||Annual charge||—|
More detail on the charges
Timing of the offer
Parkwalk aims to deploy the money within 12 to 18 months from investment. Historically, the average has been within 12 months, but there are no guarantees this will continue to be the case. As is typical with EIS and SEIS investments, it may not be possible to have all funds deployed before a deadline such as the end of the tax year.
This is the first EIS fund to be launched by the collaboration between Parkwalk Advisors and Imperial College Innovations. In our view, this is a high-quality offering within an enticing and hard to reach sector. As is to be expected from Parkwalk, there is a clearly defined investment strategy, few EIS managers have more experience in university spinouts than Parkwalk. In fact, Parkwalk has already successfully rolled this strategy out to three other world-leading universities (Oxford, Cambridge and Bristol). Imperial College Innovations adds substantial resources and expertise. This offer might therefore be appealing to investors looking to complement a wider investment portfolio, where gaining exposure to university spinouts might be more challenging.
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- University spinouts
- Target return
- Funds raised / sought
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