The UK has been ranked the best country for spinout value creation in Europe, while US acquirers have gained more from exits from the region compared to local buyers, according to a new report from data platform Dealroom.
European spinouts — companies that originated from research carried out in a university or research centre — have a combined enterprise value of $473bn, with more than 80% of that ($398bn) driven by deeptech and life sciences companies.
Successful European deeptech and life sciences companies with roots in academia include cybersecurity company Darktrace, immunotherapy and vaccine company BioNTech and buzzy AI video startup Synthesia, which are among a cohort of spinouts that have created more than 167k jobs.
After the UK, Germany placed second on spinout value creation, followed by Switzerland, France and Belgium, according to the report, which was co-authored by investors Atlantic Labs, MITO Technology, Cambridge Innovation Capital, Oxford Science Enterprises and Northern Gritstone.
It ranks a country’s universities and research centres by number of VC-backed spinouts created, how many have raised more than $10m, the number of unicorns produced and combined enterprise value.
University of Oxford on top
Between them, the UK and Switzerland have eight of the top ten universities for value created from spinouts.
The UK’s University of Oxford took the top spot, followed by its country peer the University of Cambridge. ETH Zurich and EPFL of Switzerland placed third and fourth, respectively, and Germany’s Technical University of Munich completed the top five.
Following them were University College London, the Technical University of Denmark, Imperial College London, the University of Zurich and the University of Bristol.
Exits
Overall exit value for deeptech and life sciences spinouts has dropped significantly since 2021. While M&A exit value hit a new high of around $11bn in 2024, IPOs have “disappeared” since then, the report said.
That said, this year is projected to be the strongest year on record for spinout M&A value, helped by six $1bn+ exits, including two each for ETH Zurich and the University of Oxford, and one each for EPFL and the University of Tübingen.
US acquirers have captured the majority of European spinout value, accounting for nearly $24bn since 2019 across 129 acquisitions.
There have been 167 acquisitions from European buyers, the majority of the count, but they’ve only captured around one-third of the total value, at $11.2bn.
Reliance on US investors
Deeptech and life sciences spinouts in Europe have raised $7.9bn in VC funding so far this year, a figure on track to hit $9.1bn and surpass last year’s $8.9bn. Overall funding has almost doubled since 2019.
There are still domestic gaps in the funding market. Nearly 50% of the funding for spinouts comes from outside of Europe, most of that from the US.
More than four-fifths (86%) of the capital invested at the early stage is from Europe. That figure drops to 53% at the late stage, but is up from a low of 34% in 2021-22.
Since 2021 there’s been an increase in the percentage of overall VC funding going to deeptech and life sciences startups, which has played into the hands of spinouts, which typically fall into those two buckets. In the US, 60% of VC funding goes to deeptech and life sciences, 10% above the global average. In Europe it’s about 42%.
The best research centres
The French National Centre for Scientific Research (CNRS) is the best research centre for spinout value creation, and is one of five French institutions in the top 10. The French Alternative Energies and Atomic Energy Commission (CEA) came third, the National Institute of Health and Medical Research (INSERM) fourth, the National Institute for Research in Digital Science and Technology (Inria) eighth and the Pasteur Institute ninth.
There were also four German institutions in the top 10: the Max Planck Society in second; the Helmholtz Association in fifth; VIB in seventh; and the Fraunhofer Society in tenth.
VTT, in Finland, placed sixth.
