Cambridge
Consultants restarts venturing business
Cambridge
Consultants, one of Europe’s
leading technology-based design and
development companies, has announced
plans to reactivate its spin-out business
with the creation of a new venture
fund. The company has a track record
of creating and developing start-up
companies that is second to none,
with just four of its spin-out businesses
having a combined market capitalisation
of almost £2 billion.
The fund will be created jointly by
Cambridge Consultants and an investment
partner with the aim of having it
established and operating by the summer
of 2006. Several blue-chip investors
have understandably shown considerable
interest in the fund with detailed
negotiations already underway.
The aim of the fund is to invest exclusively
in Cambridge Consultants’ own
new ventures, following the company’s
success in this arena. The fund will
allow Cambridge Consultants to re-energise
its activity in this area in a controlled
fashion, aiming to produce one spin-out
every two years on average. The first
new venture is expected to appear
in 2007. Candidates for the next batch
of ventures are expected to come from
a range of Cambridge Consultants’
core markets, including wireless technologies,
drug delivery, diagnostics, radar
and electronics.
The company has created over twenty
new ventures in the past twenty five
years, several of which have gone
on to achieve listing on the London
Stock Exchange, namely Domino, Xaar,
Prelude Trust, CSR and Vivid (sold
to Vectura). Other successful spin-offs
include Alphamosaic and Inca, who
have subsequently been acquired by
Broadcom for $123m and Dainippon Screen
for Euro 43.8m, respectively. Both
sales were achieved within five years
of the companies being formed.
Spin-outs from Cambridge Consultants
collectively employ almost 3,000 people,
many of whom are headquartered in
the Cambridge area. It is this pool
of successful technologists in one
area that has created what is often
referred to as the ‘Cambridge
Phenomenon’ or ‘Silicon
Fen’.
Ray Edgson, Ventures Director at Cambridge
Consultants, commented, "We learnt
a great deal about creating new ventures
in the late 90’s and early part
of this decade, including the effects
that creating spin-outs have on a
business of our size. Venturing can
be a very disruptive process, however,
we believe that by taking a controlled
approach to this segment of our business
model we can bring significant benefit
to our clients, our staff and our
business. At the same time we are
able to generate significant return
on investment."
Edgson continued, "Clients value
the fact that our business model is
more than just fee-for-service, as
it proves beyond doubt that we have
the skills to successfully turn innovation
into tangible value both for them
and for ourselves. Creating spin-out
companies is also a significant factor
in helping us to attract top-flight
engineers who want the benefits of
a structured career path, coupled
with the opportunity to be truly entrepreneurial."
