Northern Gritstone secures £30m investment from British Patient Capital

Northern Gritstone, the investment business focused on university spin-outs and technology-enabled businesses in the north of England, today announces that it has secured a new capital commitment of £30 million from British Patient Capital, the commercial subsidiary of the British Business Bank.

Following Northern Gritstone’s first close of £215 million in May 2022, this commitment affirms the strong interest from investors in its proposition.

The company was launched in 2021 by the Universities of Leeds, Manchester and Sheffield to accelerate the commercialisation of science and IP-rich businesses originating from these three research-led institutions alongside other science and IP-rich businesses located in the North of England. Founded with the philosophy of ‘profit with purpose’. Northern Gritstone aims to combine attractive returns for shareholders with wider positive, societal and economic impact, including supporting Levelling Up and high-skilled job creation in the north of England.

British Patient Capital joins a number of other high-profile investors encompassing local authority pension funds, high-net-worth individuals, institutional investors and real estate investors active in the tech and science ecosystem of the region, that have already made significant commitments to Northern Gritstone.

These include Greater Manchester Pension Fund and West Yorkshire Pension Fund as part of Northern LGPS, M&G, Columbia Threadneedle, Lansdowne Partners, and Bruntwood as well as Andrew Law, the CEO of Caxton Associates, and Keith Breslauer, Managing Director and founder of Patron Capital, both in a personal capacity.

Northern Gritstone is chaired by Lord Jim O’Neill and has built an experienced investment team, under the leadership of Chief Executive, Duncan Johnson, Chief Investment Officer, Marion Bernard, and CFO, James Hadley. The business made its first investments in 2022 and has already funded eight early-stage businesses, including life sciences company, Imperagen, immersion cooling technology producer, Iceotope, and biological engineering firm, Opteran. Most recently, Northern Gritstone backed Silveray, the developer of an ultra-efficient X-ray detector technology.

British Patient Capital was launched by the government-owned British Business Bank, in 2018 with an initial £2.5 billion to invest over 10 years in venture and venture growth capital. It aims to enable long-term investment in innovative UK companies and unlock an additional £5 billion in private capital to support UK businesses with high growth potential.

Duncan Johnson, Chief Executive at Northern Gritstone, said: “This significant investment from British Patient Capital marks a tremendous achievement for Northern Gritstone as we continue to attract many of the investment world’s most significant players which share our ethos, values and vision as Northern Gritstone shareholders.

“British Patient Capital’s investment is not only a testament to the power of Northern Gritstone’s mission to support science-led spin-outs in the North of England and an endorsement of our ‘profit with purpose’ investment philosophy, but will also strengthen our ability to deliver against these ambitions.

“Having already begun making investments in some of the region’s most exciting and innovative businesses, we look forward to growing our portfolio in the year ahead as we continue to work towards our ultimate goal of developing a northern hub of innovation in technology and science – a Silicon Valley of the North.”

Catherine Lewis La Torre, CEO of British Patient Capital, said: “The UK’s universities are recognised as a hub for break-through research and development. Scaling these businesses across the whole of the UK is critical, as is energising the venture capital ecosystem in the North of England. Northern Gritstone’s mission aligns with British Patient Capital’s aim to provide the patient capital required to enable the world-class businesses of the future to thrive and become players on the global stage. We are excited to work with them on driving this vision forward.”

Investments by British Patient Capital were found to be a driving force for innovation behind scale up Britain by a recent independent evaluation of BPC. 11% of BPC-backed companies are academic spinouts compared to just 2% of all equity-backed companies, turning cutting-edge research into real-world products.