Future Planet Capital, the impact investor which targets top university spinouts, has busted its £2.5m Seedrs crowdfunding target within days.
The venture capital firm, which has made £300m worth of investments in university spinouts so far, has now raised £3m through the crowdfunding platform.
It has carved out a 10 per cent corridor in future deal flow for Seedrs’ small investors, giving them the same access to top university spinouts as its institutional investors.
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Future Planet Capital has turned the standard fundraise model on its head, having already raised millions through Middle East sovereign wealth funds and billionaire investors.
Founder Douglas Hansen-Luke is difficult to pin down as to why exactly he wanted to raise money from tiny retail investors, having already raised hundreds of millions.
He said that he had already proved the investment model worked with sovereign funds, experienced investors and governments, so he wanted to open his fund to individual investors.
“Our vision has always been to connect the biggest investors with the world’s brightest minds,” said Hansen-Luke.
“To be honest, we don’t need the cash. We want to find a way to allow the crowd to have access to impact and innovation. If you can persuade sovereign funds, governments and experienced investors to invest, if it has worked for them, then we’ve already done the hard part. It makes sense to let individuals access innovation and impact.”
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Hansen-Luke launched Future Planet Capital in 2015, raising money through sovereign wealth funds, corporates and pension funds.
The VC has invested £300m in 100 business since then, with a mean investment of £3m apiece at Series B or Series C stage.
Its strategy is to invest in growth-stage companies doing environmental or social good, which have emerged from the world’s top universities such as Oxford, Cambridge, Tel Aviv and Tsinghua in China, as well as the best US campuses.
It partners with university venture funds, such as Oxford Sciences Innovation, rather than universities themselves.
The VC estimates that there are around 13,000 of these spinouts from the world’s top universities, of which only 2,500 have received investment so far.
Future Planet Capital itself intends to back between four and five spinouts from the world’s best academic institutions each year.
Areas that it invests in are: climate change, health, education, sustainable growth and what it calls security, which could include anything from food supply, border security or cybersecurity.
Two of Future Planet Capital’s portfolio have already achieved unicorn status, being valued over $1bn: genetic discovery service 23andMe and US small business pension provider Guideline.
It has made two exits to date: Vaccitech, which owns the biotech platform behind the AstraZeneca Covid-19 vaccine, and 23andMe, both of which went public this year.
The firm has also partnered with Barclays wealth management to create thematic funds for the bank’s wealthy clients, investing in up to 10 impactful start-ups each year. Some of those private clients invest in the millions.
It has already closed one fund covering infectious disease research for Barclays. Now it is working on a climate change fund that will invest in between four and 10 start-ups, whether they be in food and agriculture, sustainable consumption, energy/emissions, carbon reduction, or Internet of Things management.
Responsible investing
In many ways, Hansen-Luke’s career path has led directly to running a socially and environmentally conscious VC.
Hansen-Luke said: “Throughout my career I’ve always been able to link purpose with profit.”
He began his working life working on alternative investments at consultancy Bain & Co, followed by a stint at US investment firm Salomon Brothers ,and then moved to Hong Kong where worked for Dutch bank ABN Amro and then Dutch asset manager Robeco. One of his areas was then called “responsible investing” – what we now call ESG (environmental, social and governance).
Hansen-Luke quit banking in 2012 and founded his own “impact investing” consultancy, HLD Partners, which researched the issue of responsible investing on behalf of Middle East sovereign wealth funds, who could see the writing on the wall when it came to basing an entire economy on oil.
The spark of Future Planet Capital came out of one study, where Hansen-Luke identified that the world’s most succesful companies had all been backed by VC and all grew out of a handful of universities in America, such as Harvard, Stanford, MIT and Berkeley.
He recommended to his sovereign wealth fund clients that they invest at Series B or Series C stage in a spread of university spinouts.
He also noticed that the most successful investments were those backing companies trying to solve huge global challenges, be it climate change or food production. Impact investing therefore was a way to make profit, not virtue signalling or to make oneself feel better, Hansen-Luke concluded.
Further reading
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