Northern Gritstone, a Leeds-based deeptech and life sciences venture capital firm, has announced a £20 million rolling close of additional ordinary share commitments, bringing its total permanent capital to £382 million. The close was anchored by a £10 million cornerstone investment from the British Business Bank, which increases its total commitment to Northern Gritstone to £40 million. Additional investment came from existing shareholders, including Andrew Law, chief executive of hedge fund Caxton Associates.
The close builds on Northern Gritstone’s April 2025 £362 million permanent capital raise and marks the opening of a broader capital-raising program that the firm intends to run throughout 2026. No overall target for the full program has been disclosed.
Active since May 2022, Northern Gritstone focuses on converting university research from the so-called Northern Arc into scalable commercial businesses, backing spinouts from the universities of Leeds, Liverpool, Manchester, and Sheffield. Those four institutions collectively generate close to £800 million in research funding each year, 92% of which is rated world-leading or internationally excellent. The firm has now made investments in 51 companies across sectors, including semiconductor design and manufacturing, advanced materials, secure computing, artificial intelligence, healthtech, and gene therapies.
Northern Gritstone describes the Northern Arc as now sitting alongside Oxford, Cambridge, and London as the fourth pillar of what the industry has dubbed the UK’s Technology Diamond, a geography the firm argues remains structurally undercapitalized relative to its research output. The British Business Bank, which has supported nearly a quarter of all university spinout deals in the UK between 2022 and 2024, said its increased commitment is intended to help attract additional institutional capital into the region’s high-growth sectors. Northern Gritstone supports its investment activity with NG Innovation Services, an in-house growth platform that connects founders with expertise, scaling support, and production capabilities.
KEY QUOTES:
“We are very grateful for this further support from the British Business Bank and Andrew Law to continue developing global businesses in the North of England originating from our ‘Northern Arc’ university ecosystem. In this way, investors are contributing to future higher value-added activity and the North’s productivity.”
Lord Jim O’Neill, Chair, Northern Gritstone
“This strong start to Northern Gritstone’s rolling close in today’s challenging fundraising environment shows the belief in innovation coming from the North of England. The region is now an integral part of the UK’s Technology Diamond, and we are proud to support the incredible talent of the North, helping to commercialise groundbreaking research into internationally commercial businesses.”
Duncan Johnson, Chief Executive, Northern Gritstone
“The UK’s universities are a powerhouse of breakthrough research, and Northern Gritstone plays a vital role in transforming world-class research from the North of England into high-potential, IP-rich businesses. Our increased commitment reflects the Bank’s ambition to scale life sciences and deeptech businesses, which are critical to the UK’s future growth.”
Christine Hockley, Managing Director and Head of Commercial Equity Funds, British Business Bank
