It takes on average $2.6 billion and around 10 years for a new drug to reach the market. Most of the experiments to get to that point are still done in a lab – a slow and expensive process, and an unsustainable one in the face of global crises such as the COVID-19 pandemic and an ageing population.
In 2018, Leonard Wossnig, a German PhD student in Theoretical Computer Science at University College London, set out to solve this problem by joining a pilot programme that helps aspiring student founders turn their research into deeptech startups. Tapping into a diverse team of researchers at the intersection of artificial intelligence, machine learning and quantum computing, Wossnig launched a quantum drug discovery startup, Rahko, that predicts how drugs behave early on.
By 2019, the early stage startup had closed a £1.3 million seed round led by Balderton Capital, which recognised the team’s “unique approaches towards unlocking quantum discovery for chemical simulation,” and had become the sole European launch partner of Amazon Quantum Solutions Lab. In 2020 it secured partnerships with some of the world’s largest pharmaceutical companies, including Merck.
The following year, Rahko was named a top European quantum computing company to watch and was ultimately acquired by biotech company Odyssey Therapeutics, becoming the world’s first quantum machine learning-focused startup to reach the exit stage – a mere three years after launch.
Since launching that early pilot at University College London, now grown into Conception X, a deeptech venture programme for PhD students enrolled at UK universities, I have witnessed this happen time and again. It’s a simple but well-proven recipe. You have a PhD team working on cutting-edge research with key real-world applications. They know their innovation could help discover effective treatments for now incurable diseases, power up carbon-negative cities or tackle the future of automation. Through a combination of entrepreneurship training, access to pro-bono legal advice, funding opportunities and expert connections, we help them figure out how to turn their research into a viable deeptech startup.
While not every team ends up on the same path as Rahko, many go on to raise grants, venture capital, build lasting partnerships, and become tomorrow’s tech leaders; some adjust their trajectory and join new startups as technical co-founders; others go back to the lab with newfound focus, working on research that could change the world in a couple of decades.
It’s difficult to give an accurate overview of the unrivalled potential for meaningful innovation brewing across Europe’s research labs, which largely remains untapped due to varying – and at times stifling – IP ownership rules that can make spinout companies un-investable and hard to scale.
Conception X has been in existence for a short time compared to how long it typically takes to scale a deeptech startup – eight to 12 years – but the numbers are already there. Our early stage portfolio startups have raised more than £21 million to date, created hundreds of jobs, and the programme has grown to include participants from more than 30 universities in the UK and Europe.
The appeal is clear; top PhD students make promising startup founders: they are used to dealing with failure when conducting experiments in their labs, and know the value of persistence; they are passionate and on a mission to make a meaningful, long-term difference; they are eager to learn and aware that there are gaps in their experience or knowledge they need to fill; and last but not least, their products are backed by years of deep domain research that gives them the confidence to keep working on technology that often doesn’t yet have applications in today’s world, but that will become ubiquitous a few years from now. Some of today’s leading tech companies were founded by yesterday’s PhD students – think Google’s Larry Page and Sergey Brin, DeepMind’s Demis Hassabis and Shane Legg, Vaccitech’s Sarah Gilbert.
The Conception X model effectively speeds up the pace of commercialisation by working directly with PhD students to help them develop entrepreneurship skills and a business plan while they’re still at university, without asking them to drop out. In the UK, this is possible because PhD students often own their IP, especially when it comes to non-patentable software, and do not have to go through their university’s tech transfer office when launching a startup based on their research. Even in cases when tech transfer offices are involved, the conversation tends to be much more productive and move quickly when the student founder has a specific plan for a product.
Similar initiatives, no matter where they’re launched, can help spearhead Europe’s collaborative effort to lead the next wave of deeptech innovation, exporting technologies and startups far beyond the place where they were first conceived.
Conception X startup Sephri Solutions, which has developed the world’s first human-sized robot with visual and haptic perception for social interaction, is one such example. The venture is based on research conducted at the Max Planck ETH Center for Learning Systems, a joint academic programme between ETH Zurich and the Max Planck Society. The final product is a complex combination of next-generation hardware and software, including machine learning algorithms that teach robots to act on users’ preferences, behavioural algorithms that help robots react naturally to interactions with users, depth perception devices to inform movement, an inflatable sensing torso, and more. Early tests have already shown that the robot’s interactions with users – for now limited to hugs – can positively affect their health.
Similarly, climate tech startup Kapacity, co-founded by a PhD student from Loughborough University researching smart algorithms for demand response, has chosen Finland as its starting market. The team has developed AI-powered cloud software to optimise energy consumption in commercial buildings, and can achieve a 25% reduction in electricity costs and a 10% reduction in CO2 emissions according to early pilots.
There is no doubt that the future of innovation in Europe will emerge from its world-leading universities, which play a far more important strategic role than we currently give them credit for. As well as being education and research establishments, they are breeding grounds for inventors and founders with a tech-for-good vision, determined to work on solutions for the public benefit. In a poll we ran among our cohort last year, we found that 79% of the students wanted to commercialise their research for a sense of higher purpose.
This is not a bid to change the role of universities, engineering them beyond recognition. Governments should continue to fund academic institutions’ key education and research functions, but research and innovation should reinforce – rather than take from – each other. That is if we are serious about carving a unique path forward for European innovation, capitalising on our competitive advantage.
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