Triangulating success
Dr Richard Holliday FIMMM examines how spin-outs from the UK’s ‘Northern Triangle’ benefit from early support in their journey to market.
Spin-out businesses continue to be a central pillar for exploiting the outputs of the UK’s world-class research base. Transforming early-stage innovations into commercial products and services provides a route to both societal impact and economic benefits.
Private investment is vital for these early-stage businesses, enabling them to scale their innovations and drive commercial traction. A report on Equity Investment into Spinouts 2025 from Beauhurst and Parkwalk, reveals that, despite global uncertainty, investment into UK ventures rose sharply in 2024, reaching £3.35bln – a rise of 40% on the previous year. First-time equity investment – money in new spin-outs – grew by 68%.
That data represents all science disciplines, with materials figuring in more than 40 equity deals in related spin-out businesses during 2024-25. One area of the country offering opportunities to invest in interesting materials-related spin-outs is the ‘Northern Triangle’ region. It spans the universities of Leeds, Liverpool, Manchester and Sheffield, all places with a rich heritage in the manufacturing and materials industries.
Strong connections
While every spin-out is unique, Ionix from the University of Leeds represents many of the common features of spin-outs in the materials sector.
The business was incorporated in 2011 by co-founders from the Department of Materials. The research team had created a range of proprietary electroceramic materials that could operate in high-temperature environments, and could enable sensors, actuators and transducers that were not achievable by existing piezoelectric materials.
Receiving a first seed investment of £750k from specialist investor IP Group, the challenges to establish and grow this business were, and still are, common. First, which initial market and application to target?
Second, how to scale up materials production in a cost-effective way.
Third, which part of the value chain should the team focus their commercial efforts on to create the best value? Jumping forward a decade, Ionix has established itself as a sensor specialist in extreme environment applications, but it has taken time and significant venture capital investment to do that – again, not uncommon for materials-related businesses.
The commercialisation team at the University of Leeds continues to support a pipeline of spin-out opportunities emerging from its research base.
SwitchDye is notable given the city of Leeds’ historical connections to the textile manufacturing industry. The business has patented a CO₂-switchable dye system that allows polyester fabrics to be dyed and un-dyed on demand, without damaging fibres.
The company claims the technology reduces the need for more than 90% of chemicals and more than half the water during dyeing, and opens the door to fibre-to-fibre recycling for dyed polyester. Polyester remains one of the largest and most problematic waste streams in fashion.
Not every materials-related spin-out is developing a new class of materials. PhovIR, a recent spin-out from the University of Manchester, UK, is developing sensing technology for materials identification.
Optical spectroscopy is a powerful technique for revealing a material’s unique fingerprints. But traditional spectroscopy is hindered by size, cost, complex technical requirements, and the need for specialised expertise to operate the equipment and interpret results.
Working with the university’s wholly owned commercialisation arm – the Innovation Factory – PhovIR has identified multiple potential applications for handheld infrared spectroscopy technology with a small, broadband spectrometer. The business, now launched with the factory’s support, has patented IP and a sizeable investment to grow the technical and commercial teams.
Sustainability is a driver for many of the new spin-out businesses emerging from these universities.
Wull Technologies, again supported by Manchester’s Innovation Factory, is aiming to disrupt the market for construction insulation with plastic-free acoustic and thermal panels made from sustainably sourced Welsh sheep’s wool. Farmers are often said to lose money on each sheep they shear, so the founders of Wull Technologies sought to open up new markets for this abundant and under-utilised material. The material is reported as naturally insulative, breathable and fire-retardant.
Material recovery is a topical theme too. Manchester spin-out Watercycle Technologies designs and builds high-yield mineral recovery systems that extract saleable products from a wide range of inputs, including sub-surface brines, industrial wastewater and end-of-life batteries. Using a patented technology, the company targets mineral recovery rates of more than 95% and claims they can achieve complete conversion of the water source to drinking quality water if required.
Empowering the founders
The University of Sheffield has introduced a revised model of research commercialisation, one that places more responsibility on founders and innovators for the commercialisation process, actively encouraging them to explore the market potential of their ideas.
This innovator-led approach, termed ‘the Commercialisation Journey’, is a four-stage programme with training, mentoring and funding to support entrepreneurially minded researchers. Recent data suggests this new approach is paying dividends in terms of spin-out creation.
One example of a business birthed through the Commercialisation Journey is Pixel-Flo. It builds on the UK’s rich heritage of display technology development, dating back to the first liquid crystal materials at the University of Hull in the 1970s.
This spawned a multi-billion-dollar industry and made today’s abundance of flatscreen devices possible. Alas, the UK did not benefit greatly from this technology, but that is a story for another day.
Today, in Sheffield, spin-out Pixel-Flo is targeting the new generation of displays that will use microscopic light-emitting diodes (LEDs) to create images.
Pixel-Flo has developed a new process for microLED mass transfer, which has been a barrier to making microLEDs affordable. While existing mass transfer technologies achieve reasonable instantaneous mass transfer rates, continuous throughput is severely limited. Pixel-Flo is targeting the high and continuous throughput and scaleability necessary to populate the largest display panel sizes.
Notwithstanding this array of spin-outs, how do we get even more promising materials and manufacturing technologies from the lab to the market, building economic growth, jobs and prosperity?
Efforts to do more are well underway. Since 2017-18, the universities of Sheffield, Leeds and Manchester have actively collaborated to create a supportive ecosystem. They addressed the critical funding gap for technology-led ventures through the Northern Triangle Initiative, which lay the foundation for a new investment fund in 2022. Northern Gritstone now has more than £350mln in funding to back founders and entrepreneurs seeking to create businesses from world-class science in the region.
As of April last year, Northern Gritstone reported having made 32 investments in early-stage businesses in the North of England since its inception in 2022.
The University of Liverpool also joined this triumvirate in being able to access investment for its spin-outs. The firm has also recently built NG Innovation Services – a venture-building ‘toolkit’ that offers talent management, growth advice, business services and an accelerator programme, NG Studios.
Lighting that fire
Long before investments are made, entrepreneurial thinking needs to be sparked and ideas generated at the earliest stage of the pipeline. The Henry Royce Institute is piloting its Catalyst programme to expand the UK’s capacity for materials entrepreneurship by connecting early-stage technologies from inventors with researcher teams who assess their commercial potential.
The Royce Catalyst scheme is also effectively an applied entrepreneurial learning programme for PhD, postdoctoral and early-career researchers, equipping this next generation of future spin-out founders with entrepreneurial skills relevant to advanced materials.
For opportunities closer to market, but still lacking the commercial traction necessary to attract investment, expert mentoring can make all the difference.
The Northern Triangle Mentor Network is a collaborative project dedicated to supporting the next generation of research-led entrepreneurial talent across the three universities.
Designed to meet the specific needs of academics and their teams, the programme offers a variety of support from focused one-to-one guidance to speed networking and workshops.
More remains to be done. Speak to stakeholders involved in research commercialisation and the paucity of proof-of-concept funding remains a concern and frustration to many. Modest amounts of £50-100k of funding, generally not accessible through a normal research grant, enable initial proof-of-concept activities like prototype building or a detailed market assessment. This pre-seed funding is essential in moving technologies closer to being an investable proposition.
UK Research and Innovation’s recent publication of the independent report by Tony Hickson, Deepening University-Investor Links: A Review, sets out a vision to make improvements.
Nonetheless, as the programmes of support for academic innovators develop and greater accessibility to all forms of public and private investment is created, we should hope to see more exciting spin-out opportunities emerge from the Northern Triangle region and beyond.
Deepening University-Investor Links: A Review
UK Research and Innovation published a report in February on deepening university-investor links in the UK by Tony Hickson, Chief Business Officer at Cancer Research UK. Recommendations across four areas include:
Access to finance
- Significantly boost funding for pre-incorporation and pre-seed funding
- Improve access to scale-up finance for spin-outs
Behaviours and relationships
- Strengthen the entrepreneurial culture in academia
- Celebrate and recognise success
Investor interactions
- Enhance transparency and build trust between universities and investors
- Accelerate spin-out formation and reduce spinning out too soon
Capacity, capability and place
- Address talent gaps in leadership and expand infrastructure access for spin-outs
- Enable models for sector-based shared technology transfer offices
