Future Planet Capital wants to connect investors to startups to help solve the biggest issues facing the planet.
The world's first global university venture fund was founded in 2015 to connect major investors, startups and academics to develop commercially viable technology that addresses challenges around climate change, health, sustainability, education, or security.
These areas often overlap, as is the case with growing urbanisation, which the United Nations estimates could result in a worldwide slum population of 3 billion people by the year 2050.
Sustainable growth in cities links to many other challenges, so solutions will be sought that bring them all together.
Future Planet Capital's recent investment in PragmatIC is an example of this convergence. The Cambridge-based company produces tiny, sticky microchips that can make anything a smart object.
It can be used to document the entire food sourcing chain in the developing world, where 30-40 percent of agricultural produce is wasted before it gets to market. This increases sustainability, but can also impact health, security and climate change by ensuring food safety, ethical labour practices and production efficiency.
The company began life as a Manchester University spin-out and later relocated to Cambridge Science Park. It's attracted customers including consumer goods giant Unilever, and investment from Fortune 500 packaging company Avery Dennison and Japanese telecoms corporation SoftBank, which acquired chip designer ARM Holdings for more than US$32 billion in 2016.
"We think that's got a revolutionary impact," says Future Planet Capital founder Douglas Hansen-Luke.
"You've got one of the world's biggest chip designers as an investor, you've got one of the world's biggest packaging [companies] as a customer and you've got the brains of Cambridge University and Manchester to combine. Then it's putting itself in the right place."
Future Planet Capital introduced them to a major facilities management company in Britain, who are looking to expand their tech platform and start connecting products to the people in their network. They can act as an early customer and provide them with pilots and resources to develop their product.
Other companies in their portfolio include clinical genome diagnoses Congenica, and Alphabet Energy, a Berkeley University spin-out technology that converts waste heat into electricity.
Congenica has attracted interest from Beijing Genomics, China's largest DNA tester. Alphabet Energy has had conversations with General Motors as its technology can be attached to a car exhaust to reduce fuel consumption by 5 to 10 percent.
Future Planet Capital is helping bring both to the Middle East, because the region is particularly impacted by both rare diseases and emissions reductions.
How Future Planet Capital works
Hansen-Luke has worked with large institutional investors for the last 20 years, most recently for Dutch asset management firm Robeco. He founded Future Planet Capital after analysing why institutional investors were consistently missing out on investing in lucrative startups.
“More than half the value on the American Stock Exchange over the last 20 years has come from tech companies or knowledge companies, but sovereigns have failed to really get in there early," says Hansen-Luke, who was a Conservative Party parliamentary candidate at the 2015 general election.
"We worked with them on designing the best way to invest in innovation."
The innovation fund does this by connecting sovereign funds such as the Oman Investment Fund and recently-launched British Innovation Fund with startups at leading universities, with whom it has developed investment partnerships.
They include Oxford, Cambridge, Harvard, the Massachusetts Institute of Technology (MIT), and Tsinghua University in Beijing, the alma mater of the last two presidents of the People's Republic of China.
The university system adds a support network to the ingenuity that strengthens the chances of successes.
"Universities are pretty much the source of inventiveness," Hansen-Luke explains. "Depending on which university it is, they can also be quite good at commercialising it. To us, it seems silly to take lots of risk on startups which don't have a university connection."
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Their strategic partners on the ground invest seed and first round funding from their university. Future Venture Capital then evaluates which portfolio companies are doing best and meet their impact criteria, before providing additional investment alongside that of their university partners.
Those criteria include the research or university link, their track record and partners, the impact they could have, their potential to scale, financial requirements and how Future Planet Capital can add value.
They plan to make 30 percent of their investments in the UK, roughly commensurate with the proportion of UK institutions among the top ten universities around the world.
The university venture fund could help plug the gap left by vital European Union funding initiatives such as the Horizon 2020 programme which may no longer be accessible after Brexit.
The EU was the source of £725 million of the research income received by UK universities in 2014/15, 12 percent of their £5.9 billion total. But this figure is dwarfed by the $7.1 trillion (£5.4 trillion) in assets under management held by sovereign wealth funds.
"The European money had an agenda: it was to cross-European research, it was to promote further integration of the European vision,” Hansen-Luke explains.
"We're leaving the EU and suddenly that money is no longer there, so there was clearly a political link to it. By being a comingled fund, we can take money from China, we can take it from America, from British local authorities, we can take it from the Middle East.
"When those government institutions invest in us, they know that our criteria aren't political, they're simply about whether or not we can make money, and whether or not the investments we make will have a positive impact on the world. And that means that it's long-term secure money that's not going to be buffeted by political change."