Northern Gritstone Leeds Raises £20m for University Spinout Fund

Northern Gritstone Leeds-backed venture fund reaches £382m permanent capital after £20m rolling close from British Business Bank and Andrew Law

Northern Gritstone, the deeptech and life sciences venture capital firm that invests in spinouts from the University of Leeds and three other Northern universities, has raised £20 million in the first close of its rolling fundraise. The investment, from existing shareholders including the British Business Bank and Andrew Law, CEO of hedge fund Caxton Associates, brings Northern Gritstone Leeds and the wider fund’s permanent capital to £382 million. The British Business Bank’s £10 million contribution takes its total commitment to Northern Gritstone to £40 million.

Why This Matters For Leeds

Northern Gritstone has an office on the University of Leeds campus and invests in spinouts from the university’s research base. For Leeds, the structure is significant, this is a vehicle specifically designed to turn university research into commercial businesses in the North. The fact it’s raising in a tough market suggests the model is working. Read more Leeds business news across all sectors.

What Northern Gritstone Leeds Invests In

Northern Gritstone has made 50 investments since launching in May 2022, backing companies in semiconductor design and manufacturing, novel materials, secure computing, AI, healthtech, and gene therapies. Many of its portfolio companies are spinouts from the four “Northern Arc” universities, Leeds, Manchester, Sheffield, and Liverpool, which together generate close to £800 million in research funding annually. Northern Gritstone describes these four universities, alongside Oxford, Cambridge, and London, as forming the UK’s “Technology Diamond.” The firm has offices at Nexus on the University of Leeds campus, as well as in Manchester, Sheffield, and London.

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The £20 million close is the start of a wider fundraise planned over 2026. Northern Gritstone operates as a permanent capital vehicle rather than a traditional fund with a fixed life, which means it can hold investments for longer and reinvest returns. CEO Duncan Johnson described the close as a strong start in a challenging fundraising environment, reflecting confidence in the innovation coming from the North of England

“The UK’s universities are a powerhouse of breakthrough research, and Northern Gritstone plays a vital role in transforming world-class research from the North of England into high-potential, IP-rich businesses. Our increased commitment reflects the Bank’s ambition to scale life sciences and deeptech businesses, which are critical to the UK’s future growth.”

— Christine Hockley, Managing Director, British Business Bank

For the University of Leeds research community, Northern Gritstone represents a dedicated route to commercialisation that didn’t exist before 2022. The £800 million in annual research funding generated by the four Northern Arc universities produces intellectual property that has historically been commercialised by London or international investors. Northern Gritstone’s model, permanent capital, based in the North, with offices on campus, is designed to keep that value closer to where the research originates.

“We are very grateful for this further support from the British Business Bank and Andrew Law to continue developing global businesses in the North of England originating from our ‘Northern Arc’ university ecosystem.”

— Lord Jim O’Neill, Chair, Northern Gritstone