The UK government is reportedly planning a significant crackdown on university spinouts that move their operations abroad or float overseas. Sir Ian Chapman, chief executive of UK Research and Innovation (UKRI), stated that his organisation intends to strengthen the conditions attached to government grants.
This initiative seeks to curb the trend of rapidly expanding firms being acquired by foreign competitors and investors. Chapman noted that UKRI's current intellectual property terms are the most liberal among G7 research investors, and the body is now reviewing these terms and consulting for input.
While specific options were not detailed, potential measures could involve compelling IP-heavy spinouts to favour a London listing or recovering investments and grants if they accept an offer from an overseas buyer. Chapman did not dismiss the idea of a punitive exit tax on firms moving abroad, although two individuals within the Department for Business, Innovation, Science at Trade (DBIST) indicated it is not currently under consideration.
The UK has seen many successful university spinouts, often supported by venture capital and UKRI grants, but many of the largest have either listed overseas or been acquired by foreign entities. Examples include Deepmind, bought by Google in 2014, and Arm, acquired by Softbank in 2016 and listed on Nasdaq.
These proposed changes risk a negative reaction from the UK's founder and venture capital communities. Critics, such as Michael Moore of UK Private Capital, warn that clawing back public grants could create larger problems by deterring early-stage investment and reducing company valuations.