The creation of spinout companies based on the innovation taking place in universities across the UK is a significant driver of economic growth, translating high-quality research into real-world solutions. This week’s announcement from Universities UK of an ambition to double external investment into UK university innovation by 2035 is an indicator of its importance.
But creating the right conditions to support the creation of new companies is just as important as the research itself – without them, even the most promising ideas can fail to succeed and reach their potential.
Access to finance is one of the major barriers to both increasing the number of spinouts being created, and enabling those companies to grow, yet the scale of that challenge is not felt equally across the different parts of the UK. Addressing it requires strategic intervention involving multiple stakeholders.
The North East of England has today taken a major step toward resolving this challenge through the creation of an early-stage investment fund dedicated to university spinout creation.
The Spinout Inspire Fund is a £22.5 million vehicle bringing together the North East Mayoral Strategic Authority (North East MSA), the North East Fund Ltd, and all five of the region’s universities: Durham, Newcastle, Northumbria, Sunderland and Teesside. It is the first fund of its kind for our region and the result of a collective commitment to economic growth and prosperity that demonstrates what can be achieved when universities, through partnership initiatives like Universities for North East England (UNEE), collaborate with their strategic mayoral authorities.
Why this, and why now?
The February 2026 review by Tony Hickson, commissioned by Research England on behalf of UKRI, offered a rigorous diagnosis of what holds UK spinouts back.
His conclusion was not that universities take too much equity – a central concern of the 2023 Independent Review of University Spinout Companies – but that the deeper problem is access to capital, particularly at the pre-seed and early-seed stages, and the uneven geography of that access.
As the Hickson review noted, spinout rates at Oxford and Cambridge rose significantly when increased local investment became available. The implication is clear: not that the research base elsewhere is weaker, but the investment infrastructure is less well developed. That lack of development has been acutely felt in the North East.
Our universities collectively produce a substantial body of research with real commercial potential. Northern Accelerator – our shared spinout support programme, specifically cited in the Hickson review as an example of leading collaborative practice – has demonstrated what is possible when institutions work together rather than compete. But support infrastructure and early-stage investment are different things. For too long we have brought promising companies to the point of investment readiness, only to watch them struggle to find capital in a region where early-stage venture funding has historically been scarce.
The Spinout Inspire Fund is a direct response to that gap. It will sit alongside the wider £90 million Access to Finance infrastructure deployed by the North East Fund Ltd and sponsored by the North East MSA, creating a genuine progression pathway for university spinouts from early seed through to scale-up.
Northstar Ventures will manage the fund with an approach tailored to each university’s research base and commercialisation maturity. Northstar is a fund manager embedded in the region, whose commitment goes beyond just fund management into actively supporting and guiding our academics from their initial steps on the commercialisation journey.
What makes this different
I think it is important to be clear about what is genuinely novel here, so that other regions looking to develop similar initiatives may learn from our experience.
Firstly, the governance structure: each of the five universities is a limited partner and investor in the fund, alongside the North East MSA. We are not simply recipients of a service or passive observers of someone else’s investment decisions. We have a stake in the outcomes, and we have a voice in the partnership. That changes the dynamic fundamentally: universities as partners within a fund behave differently from universities with a referral arrangement.
Secondly, the deliberate co-investment architecture. The fund has been structured to attract new investors into spinout companies alongside its own capital – building confidence in the regional spinout ecosystem among a wider investor community that has historically focused its attention further south. This is not a short-term fix; it is an attempt to shift the investment culture of the region over time, so that the next generation of spinouts does not face the same structural disadvantage as this one.
And thirdly what sits around the fund. Research England’s commitment of £8.9m over five years to SCENE – a programme aligned to the Northern Accelerator – and the continued North East MSA investment in Northern Accelerator itself, means the Spinout Inspire Fund will not be operating in isolation. It is the investment layer in an ecosystem that now has real depth and evidenced success: ideation and proof of concept support, commercialisation expertise, training and development, access to industry partners, and now early-stage capital.
That combination is precisely what the Hickson review identifies as the distinguishing feature of high-performing spinout ecosystems – and something the UNEE partnership is very proud to have helped build. Since 2016, the partnership has created 65 spinout companies, employing over 900 people, and attracting over £312m in investment. This new fund is the missing link, and will give us the ability to significantly increase our regional impact. We are deeply grateful for the support we have received from the European Regional Development Fund, Research England’s Connecting Capability Fund, and UK Shared Prosperity Fund over the ten years of Northern Accelerator.
What this means for the region
We project gross returns of over £60m on the £20m invested in companies by 2040 – a threefold return flowing back to the region for reinvestment. However, we do not want the financials to distract from the main principle on which this fund was established.
The North East has faced the persistent challenge that many of our best ideas have ended up being developed, scaled and employed elsewhere. Research commercialisation, done well, is one of the mechanisms by which we can retain that value – creating high-quality employment, anchoring supply chains, and building the kind of innovation clusters that attract further investment. The industrial strategy’s cluster ambitions will not be delivered by London and the South alone.
UNEE exists to speak with one voice on exactly these kinds of questions: the points where individual institutional interest and collective regional interest converge. The Spinout Inspire Fund is that convergence made real. Five institutions, each with different research strengths and different levels of commercialisation maturity, have agreed to pool resources, together with the MSA, and commit collectively to a structure that puts the region first.
The honest challenge
None of this is without risk or difficulty. Investment fund deployment and management is a long game measured over fifteen years, not fifteen months. The governance arrangements – quarterly investor panels, monthly pipeline reporting, active performance management against agreed investment targets – are designed to keep all partners focused on our mission to deliver economic growth within the North East and commercialise our world-class research. But they will require sustained engagement from university leadership across all five institutions, not just at launch.
There is also the question of whether this model can be sustained beyond the current funding commitments. Northern Accelerator is a critical enabler of what has been achieved to date in our region, but it is not something that universities can sustain alone. We need longer-term commitments to eco-system support to ensure what we have created here thrives and endures. We continue to engage with our partners to explore longer-term solutions, and more broadly, the HEIF formula review now underway will shape how university knowledge exchange is resourced nationally from 2027. The North East’s ability to demonstrate impact from this kind of place-based, collaborative investment will matter for that conversation.
I am genuinely optimistic. Not because the problems are solved, but because for the first time in my experience, the right people around the table have agreed to take a risk together. In a sector that is sometimes better at analysing collective problems than solving them, that is worth noting.
