Creator Fund, which identifies and invests in research students who are pioneering in their field, has announced its second $20 million fund. The fund will target the best scientific minds in the UK, helping them to turn their ideas into scalable businesses.
The first fund in Europe to use the Silicon Valley-style model of investing in students, it already has some notable successes to its name, ranging from mutation-proof vaccines to self-flying drones.
Backed by a range of founders, including those behind Lastminute.com, Faculty and Wayve, along with leading investment firms, including GPs of a number of leading European investment firms like Kindred Capital, firstminute.capital, Elkstone, MMC Ventures, and Episode1. Lord Rumi Verjee, one of the founding investors along with Founders Factory, said that “Creator Fund is unique in its purpose and approach. It has proven itself as a formidable force in identifying early founder and investor talent and nurturing it.”
Jamie Macfarlane, the founder and CEO, spoke to TFN about the fund, how it works, and what they are looking for in their next investments.
Unleashing the potential in universities
Macfarlane’s career had already taken him around the world when he went to Stanford for his MBA. It was there that he started working in VC and for the Dorm Room Fund. “It was the genesis of the concept,” he explained. “I saw how in America, everything from Facebook, to Snapchat, to DoorDash, to Rent the Runway, to Dell, were all started by student founders in universities. And I looked back in Europe and I thought, ‘well, we’ve got exactly the same calibre of universities, we’ve got exactly the same talent.’”
Creator Fund started small, focusing on a few universities, but the early successes snowballed and the fund grew. The fund now has teams at 28 universities across the country, looking for the next generation of innovators and disrupters. The model used has remained the same, “we’ve got excellent PhD talent deep inside laboratories, deep inside programmes, where the most exciting innovation is happening across the UK,” says Macfarlane. Creator Fund provides pre-seed funding, helping the ideas find their commercial feet. “We find opportunities really early, and then work with those companies to go and raise large follow-on rounds.”
Successes from the first round include Recycleye, which uses machine vision to maximise the reclamation of recycling from rubbish, which went on to raise £3.4 million, or Touchlab, which has created a ‘skin’ to give robots a sense of touch and closed a £3.5 million funding round last month.
Macfarlane does, however, say that they have changed the model slightly, so they can continue to support some of their businesses. “We should have written some bigger cheques,” he admitted, “so the new fund will have a small portion to invest in the follow-on rounds of companies that are succeeding from fund one.”
Looking for a diverse set of opportunities
One of the strengths of Creator Fund is that because it is searching at universities, it is identifying a more racially and geographically diverse range of founders than is traditionally associated with the funding scene. And that diversity is important to the fund’s long-term impact. By ensuring that there is diversity among 38 student investors, the decision-makers, and the funders, McFarlane believes they are helping improve the long-term balance of tech funding. “I think, historically, about 61% of our students have been outside the south-east of England, outside London, Oxford and Cambridge,” he says. “And we’ve got we’ve got a very strong track record of backing brilliant, black, and Asian founders.”
Macfarlane sees the fund’s purpose as identifying the future leaders of their sector. “What we look for is a deep technical expert in their field, since they are likely to build the winning proposition in that sector.” The ideal is for some who has mastered their field and is now looking for the best way to maximise the impact of their research.
However, they are also looking for some personal qualities too. “You want to devote the next 10 years of your life to building the definitive company. Having a bias for action and being absolutely ruthless in your focus in terms of pursuing a business is so important to us,” Macfarlane said. “We’re really looking for that focus and drive. We don’t think the technology has value irrespective of the founders, we’re backing a founding team. And that’s really important to what we do and how we work.”
In return, companies that receive Creator Fund investment have access to a large network of other innovators and investors, as well as strategic support. For Macfarlane, offering that opportunity to develop ideas is what’s exciting about Creator Fund. “The diversity of innovation that we support is very, very cutting edge. It’s people operating on the line between what’s possible and impossible,” he said. “It’s very exciting every day to wake up and work with people that are operating on that kind of future plane.”