Investor Northern Gritstone gets capital commitment

Northern Gritstone CEO Duncan Johnson

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

The news follows Northern Gritstone’s first close of £215 million in May 2022.

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 said it 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 Northern England 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 Caxton Associates CEO Andrew Law, and Patron Capital founder Keith Breslauer, both in a personal capacity.

Northern Gritstone is chaired by former Goldman Sachs executive Jim O’Neill and has built an experienced investment team under the leadership of CEO 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 UK 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.

Northern Gritstone CEO Duncan Johnson 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.”

British Patient Capital CEO Catherine Lewis La Torre 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.”