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A British technology winner

An Edinburgh based investment company that provides commercialisation services to university spin-outs reports strong progress for its investee companies
August 8, 2022
  • Successful funding round for Cambridge University spin-out, CamGraPhIC
  • Fieldwork Robotics launches the world’s first raspberry-picking robot in Portugal

Edinburgh-based Frontier IP (FIPP:68.5p), a technology investment company that provides commercialisation services to university spin-outs in return for ‘free equity’ stakes, has announced a £1.26mn funding round for Cambridge University spin-out, CamGraPhIC.

The company is developing graphene-based photonics technology for scalable optical transceivers, devices at the heart of high-speed data and telecommunications networks which could become a core enabling technology for next generation 5G networks and beyond.

Current versions of the technology have speeds of up to 100Gbps, or twice that achieved by equivalent technologies, and use 70 per cent less energy, too, so are cheaper to buy and run. Other uses include 6G mm wave, which has the potential to transmit data at speeds up to one terabyte per second, and networks that meet the demands of processor-intensive artificial intelligence (AI) applications.

Having raised £1.6mn of funding in the second half of 2021, proceeds from the new funding round will be used to complete fabrication and testing of the demonstration devices. CamGraPhIC has attracted interest from major multinationals in the chip and telecoms sectors, and plans to start customer testing in a matter of weeks. The company has also attracted the attention of Sir Michael Rake, the former chair of BT (BT.), who has invested in the company and will join its board later this year. Frontier invested £0.3mn in the latest funding round and retains a 20.8 per cent stake.

It’s not the only portfolio company that is commercialising its technology. Earlier this summer, Fieldwork Robotics, a spin-out from the University of Plymouth, launched the world’s first raspberry-picking robot at a farm in Portugal. Leased to Chichester-based Summer Berry Company, a supplier to M&S, Tesco, Sainsbury’s and Waitrose, a single harvesting robot aims to pick 25,000 raspberries a day, compared with 15,000 for a human over an eight-hour shift. Given the labour shortages in the agricultural industry, and the need to improve efficiency, Fieldwork’s technology could gain serious traction. The company hopes to have five robots leased out by the year-end, and 40 more in 2023.

Moreover, other investee companies have been successfully attracting follow-on investments, too. In late May this year, Cambridge Raman Imaging raised £1.1mn to accelerate commercialisation of its high-speed Raman imaging technology and AI supported diagnostics, initially for use in medical devices to diagnose and support treatment of diseases, such as cancer. Frontier holds a 26.8 per cent stake in the company worth £1.6mn.

Admittedly, Frontier’s share price has pulled back since it announced a 21 per cent rise in net asset value per share to 84.7p in the second half of 2021 (‘Investment company watch’, 18 March 2022), albeit the price is still ahead of my 56.5p entry point (Alpha Research: ‘A differentiated IP play’, 15 November 2019). The de-rating is harsh given that Frontier’s listed Nasdaq stake in Exscientia (US:EXAI), a clinical-stage pharma technology company pioneering the use of AI to design new drugs, and cash back up almost half Frontier's market capitalisation, while a number of investee companies are now accelerating their commercial development. Buy.

Simon Thompson was named Journalist of the Year at the 2022 Small Cap Awards.

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