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R230m fund will commercialise SA university tech projects

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The University Technology Fund (UTF) has secured R230 million in funding, to help commercialise technology, research and intellectual property (IP) originating from South African universities.

The UTF is a venture fund launched in January.

The fund, garnered since February, bridges the gap between technology ideation, research and intellectual property development and the commercialisation thereof, providing an opportunity to catalyse and commercialise the technology transfer industry in SA, ensuring it achieves its full potential and social impact.

The UTF says since its launch, it has made significant progress towards fulfilling its mandate, investing in a number of companies which are affiliated to local universities, including BioCODE (Stellenbosch University), Phagoflux (Stellenbosch University), Cape Bio Pharms (University of Cape Town), Hydrogen Energy Applications (University of Cape Town), Hyrax Biosciences (University of the Western Cape), and the Stellenbosch Nanofiber Company (Stellenbosch University).

Most of these companies are involved in addressing challenges associated with the COVID-19 pandemic.

In a virtual briefing yesterday, Tom Hockaday, chairperson of the UTF, announced the funds invested in these initiatives will be allocated to pre-commercialisation funding, which includes proof-of-concept and technology development support, as well as for commercialisation and growth.

“South Africa has a wealth of untapped university IP and technology innovation that is ripe for commercialisation,” noted Hockaday.

“Our own experience in the UK shows us this is an achievable objective that can have a hugely positive impact on the economy. We all know how difficult it is to establish a start-up and ensure its success. This fund will set the start-ups on a trajectory to improve the economy and create jobs, and allow the country to develop products and services to better serve society and improve people’s lives.”

UTF’s investors include the SA SME Fund, Technology Innovation Agency, Small Enterprise Funding Agency, General Partner, and significant co-investment from Stellenbosch University and the University of Cape Town.

Hockaday oversaw the expansion of Oxford University Innovation,a British technology transfer and consultancy company, created to manage the research and development of university spin-offs.

He helped grow it into one of the leading university technology commercialisation organisations, and in April, he published his book, titled: “University Technology Transfer: What It Is and How to Do It”.

In the past, many lucrative and innovative projects developed in SA have either remained dormant, or often get exploited by foreign parties with little to no benefit coming back to SA, he added.

The fund’s mission, according to Hockaday, is to prove that university technology in SA is a viable asset for investment, as is the case internationally. It also seeks to ensure world-class research and innovations stemming from local universities get the support required to achieve social impact and the sustainability required to ensure it benefits communities and the greater society.

“Tens of billions of rands are spent annually funding SA’s university projects, with very few start-ups licensing or commercialisation agreements being signed, due to either a lack of risk funding, or lack of understanding the business case of the project, or sometimes the project lacks a commercial or market focus – the UTF exists to fill this gap.”

University technology investments globally have proven to be an incredibly successful market, continued Hockaday. A survey of 84 universities in the US and Europe found these universities attracted 141 funds, with an individual project garnering an average of $6 billion each.

The UTF recently signed a term sheet to conclude an investment in Stellenbosch Nanofiber Company (University Stellenbosch) and will close this investment soon.

Wayne Stocks, partner at the UTF, comments: “The growth and scale of university technology funds globally is testament to the success of these funds as an investment asset class. Likewise, South Africa has the opportunity to commercialise its university-developed IP and technology for the benefit of the country.

“While SA’s mining industry has been slow and largely unsuccessful in its beneficiation of the country’s gold, diamonds and other valuable minerals, in contrast, SA now has the opportunity to beneficiate a further valuable commodity which is its university IP and technology.”

The beneficiary organisations of the UTF were all founded by university staff (professors and doctors), who have conducted various research projects at the universities. They are:

  • BioCODE Technologies, which has a team of engineers, physiologists and biochemists who combine unique skills and technologies to develop point-of-care smart sensing solutions that detect novel circulating inflammatory molecules in the blood.
  • Hydrogen Energy Applications is a South African “deep tech” start-up focused on electricity generation for telecom towers using hydrogen fuel cells.
  • Hyrax Biosciences has developed Exatype, a DNA analysis online platform that enables the rollout of accurate, automated genetic diagnostics at scale.
  • Phagoflux aims to impact the health science, diagnostics and wellness sector by providing sensor technology for autophagy monitoring. Autophagy (literally ‘self-eating’) is an intracellular bulk degradation pathway, indicative of the cell’s self-cleaning activity.
  • Cape Bio Pharms is a biopharming company that produces commercially valuable pharmaceutical proteins in our plant-based transient expression system.
  • Stellenbosch Nanofiber Company creates a better world with nanofibers. Its scalable technology platform for mass production of nanofiber materials makes it possible (and commercially feasible) to spin nanofiber materials from many different natural and synthetic polymers, and create multi-layered or blended fibre materials easily and cost-effectively on a commercial scale.
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