The UK's later-stage startup funding landscape is set to receive a significant boost with the launch of a new £100 million growth fund by Cambridge Innovation Capital (CIC). The Opportunity Fund, anchored by Aviva Investors and British Patient Capital, will invest in growth-stage deep tech and life sciences companies, aiming to bridge the funding gap that has historically led to a drain of UK startups towards other countries, particularly the US.

According to the European Investment Fund, the US has at least seven times more large-size VC funds than Europe, highlighting the need for initiatives like CIC's Opportunity Fund. The fund will invest up to £20 million per investment into the later-stage funding rounds of deep tech and life sciences companies, providing a much-needed capital injection to help these businesses scale.

The launch of the Opportunity Fund is timely, given the UK government's recent announcement of its "AI Action Plan" – a string of measures designed to grow the economy using AI, including a pledge to build Europe's "Silicon Valley" by super-charging the existing tech ecosystems around Oxford and Cambridge universities. The "Golden Triangle" of London, Oxford, and Cambridge, comprising five leading UK universities, will also receive greater links, including transportation, alongside a package of £14 billion in funding.

Andrew Williamson, Managing Partner at CIC, explained that the fund's creation was driven by the need to support companies that have matured beyond the early-stage investment phase. "Historically, what we've done is when our companies get to Series C stage…. we didn't have the capital in our core funds to make those [later stage] investments," he said. The Opportunity Fund will enable CIC to continue supporting these companies as they grow, addressing a critical funding gap in the UK's startup ecosystem.

The fund has already made two investments, with Pragmatic Semiconductor, a large chip designer and manufacturer, raising $389.3 million to date, and Riverlane, a quantum computing error correction company, raising $120.7 million. These investments demonstrate the fund's focus on deep tech and life sciences companies, which are critical to the UK's future economic growth.

CIC's portfolio has a strong track record of successful exits, including the sale of gene therapy company Gyroscope Therapeutics to Novartis for $1.5 billion, the $285 million acquisition of pet treatment developer PetMedix by Zoetis, and the sale of liquid biopsy platform Inivata to NeoGenomics for $390 million. These exits highlight the potential for growth-stage companies in the UK to achieve significant scale and value.

Cambridge, with its rich history of producing significant companies like ARM Holdings, Abcam, Darktrace, and Bicycle Therapeutics, is well-positioned to benefit from the Opportunity Fund. The fund's launch is a positive development for the UK's startup ecosystem, providing a much-needed source of growth capital for later-stage companies and helping to address the country's long-standing funding gap issue.

As the UK continues to navigate its post-Brexit economic landscape, initiatives like CIC's Opportunity Fund will play a critical role in supporting the growth of innovative companies and driving economic growth. With its focus on deep tech and life sciences, the fund is well-positioned to have a significant impact on the UK's startup ecosystem, helping to create a new generation of scale-ups and unicorns.