New tech commercialisation firm joins AIM

Ipso comes to the market with one such relationship tied up, with the University of Loughborough, and says it has ambitions to agree eight more deals over the next three years.

But there is now significant competition in the sector, with IP Group, Imperial Innovations, BioFusion, Amphion Innovations, MMI Group, Angle plc, and Sigma Capital Group, all fishing in the same pond.

However, there remain plenty of opportunities according to Nick Rodgers, co-founder and CEO of Ipso. “Universities are under pressure to improve their technology transfer,” he told Science|Business. “We think there are about 60 universities in the UK with valuable IP, of which 16 have done deals, so there is a huge market.”

He admits Ipso will be running to catch-up with the likes of IP Group, which now boasts 53 spin-out companies and ten university partnerships. And the company’s annual results, published this week, shows this is developing into a lucrative business, with post tax profits of £40.1million, up from £5.6m in 2005.

In total, IP Group now has equity investments in spin-out companies valued at £87.4m, and in 2006 had cash proceeds of £3.1 million from sales of equity investments.

In a previous position Rodgers was involved in negotiating IP Group’s first two deals, with the universities of Oxford and Southampton. “There is an element of catch-up. But we have the benefit of the fact that we know what has happened in the past,” he said. 

On the basis of this experience, Ipso has developed a slightly different approach. “We have learnt a lot, and there are things we think we can do better,” said Rodgers. An example is finding good management teams to run spin out companies. “We push that to the fore. From the universities’ point of view this is really important.”

Investment in tech transfer

Ipso points out that over £250 million has been spent by universities and other research institutes on technology transfer over the last five years. Much of the funding, provided by the government through the Higher Education Innovation Funding rounds, has gone into setting up technology transfer offices. According to Ipso, there are now over 120 tech transfer offices in the UK of varying sizes and degrees of sophistication.

The key issues they face are the recruitment of experienced management, the ability to validate their IP, the assessment of the market and funding, and realising the value of research through an appropriate exit.

Of the £4.5 million raised in the listing, £3 million is committed to fund Ipso’s  ten-year relationship with Loughborough. Rodgers said that being on AIM will enable London-based Ipso to come back to the market for more money, as and when it signs further partnerships.

The agreement with Loughborough covers the commercialisation of all future IP generated from research carried out at the university. In return for an equity stake, Ipso will provide start up capital and ongoing strategic, commercial and financial support.

Although Loughborough is best known as a centre for sporting excellence, it also has strong faculties in engineering and physical sciences, and has a long tradition of collaborating with industrial partners. It is stepping up its technology transfer activities on three fronts. Along with the deal with IPSO, the university created a new post of Pro-Vice Chancellor for Enterprise and announced its first enterprise fund to award grants to aid commercialisation of research.

Follow-on funding promised

Rodgers is confident that there will be follow-on funding for companies Ipso sets up. “The funding situation has never been as bad as people complain it is,” he believes. “Not everything should get funded – survival of the fittest is not a bad thing. And there is money around at present. The stock market has been rising for the past three years and people have capital gains they are looking to re-invest.”

Ipso was founded in April 2005 by Rodgers and Simon Hunt, executive chairman. In May 2006 the company secured £1.5 million from a London-based hedge fund, RAB.

 To date it has created three companies. The first, Intelligent Wound Care, is based around research carried out in the Department of Bioengineering at Imperial College London, to develop methods for monitoring the metabolic status of wounds.

In October 2006, Ipso invested in Therakind, a spin-out company from Imperial’s School of Pharmacy, which is involved in the formulating paediatric medicines. The third company is WildKey ,a spin-out from Oxford Brookes University, which is developing educational software for use on handheld devices.