Rachel Reeves says the British Business Bank’s proposed £150m cornerstone investment in Playground Global is “a vote of confidence in Britain’s world-class science and engineering talent.”
I don’t believe her.
The UK looks like Europe’s spinout leader. The numbers say so: £59.9bn in combined portfolio value, nearly as much as Germany and France combined. But that headline figure hides the fact that funding’s collapsed over the past six years to reach just £1.3bn in 2025 (down from £2.2bn in 2024).
And when you dig into the data, it gets worse.
Oxford dominates. £13.4bn, more than a fifth of the UK’s total spinout value, sits in one university’s portfolio. They’ve raised £3.4bn.
But TU Munich’s portfolio is worth significantly more (£17.4bn) and it’s also raised more (£3.5bn). It’s a crack in the UK’s image that it’s truly the leader. It also means: Germany’s concentration problem mirrors the British one.
It’s not all bad news. Bristol is genuinely impressive: £8.5bn portfolio, £3.2bn raised. That’s more investment than Cambridge, whose portfolio is worth £10.1bn after raising £3.1bn.
These are things worth celebrating, but the golden triangle is a problem. It is a single point of failure. It’s also undue pressure on a handful of universities to keep generating blockbuster spinouts, even if that is an ecosystem as mature as Oxford. And if there’s less funding being raised by spinouts, and the majority of that money still goes to the golden triangle, that spells trouble for the country.
So if Reeves truly believed in British talent, where’s the evidence?
Universities UK announced at the UK Global R&D and Science Investment Summit in London today that it is setting a goal of attracting a total of £100bn in external investment into university spinouts, startups, and social enterprises by 2035. It’s an ambitious goal.
Notably, there is a clear emphasis on regional economies, working with mayors and devolved nations to ensure this isn’t simply reinforcing the status quo of the golden triangle.
Universities UK will also work with UKRI to implement the recommendations of Tony Hickson’s review and the Spinout Review to further strengthen investor-readiness of spinouts. And it will work with government “to support the spinout environment” (whatever that means).
Reeves says: “I’ve been clear about my plan to double down on investment, drive growth and back the industries of tomorrow.”
Has she?
The British Business Bank’s move, announced yesterday, is to commit up to £150m to an American VC to launch a UK-centric fund. That reads differently. It reads like: we’re not confident enough in British capital allocators to back more regional spinout investment funds.
Every time a UK startup gets acquired by an overseas corporation, there’s the argument that Britain can’t build large companies on its own soil. How does putting British taxpayer money into US venture capital firms mitigate Britain’s startups fleeing across the Atlantic?
No, seriously. Explain to me why giving £150m to a Silicon Valley firm and just £10m to Northern Gritstone (which brought BBB’s total commitment to the latter to £40m) is “a vote of confidence” in Britain’s innovation ecosystem.
Several of the UK’s spinout funds have had a tough time raising capital. You could argue that it’s a difficult macroeconomic climate. Sure. But here’s the thing: that same macroeconomic climate hasn’t been an issue in the EU, where the EIF often acts as an anchor investor in spinout investment funds (here are three, yes three, just from Spain this year). When the EIF doesn’t, other state-owned backers do, as Germany’s KfW Capital did for the Creator Fund – which invests across Europe but is based in the UK! – only yesterday.
The EIF isn’t sending £150m to American VCs. They’re backing their own regional infrastructure. That’s what real confidence in talent looks like.
So when Reeves talks about a vote of confidence in British science and engineering talent, what she really means is: we’re confident enough to outsource the decision to Silicon Valley. That’s not so much Labour’s often-touted ‘decade of renewal’ and more of a managed decline.
Want more insights like this? Sign up to The Briefing, The Next Leap‘s weekly newsletter.
