Scaling Deep Tech in the UK with Cambridge Future Tech’s Katie Underwood
Katie Underwood is partner at Cambridge Future Tech, a deep tech venture builder that creates companies from nascent IP emerging from university labs and corporate research groups.
Katie Underwood is partner at Cambridge Future Tech, a deep tech venture builder that creates companies from nascent IP emerging from university labs and corporate research groups.
What is Cambridge Future Tech’s approach to venture building?
Cambridge Future Tech is a deep tech venture builder that works at the earliest stages to create companies from nascent deep tech coming out of university labs and corporate research groups. We build companies around technology that wouldn’t otherwise have existed. For example, we might be commissioned by a large corporation such as Anglo American to scout for technology to decarbonize the steel industry. We’ll find that technology held within a research group, often with no other mechanism to support its commercialization, and then we’ll spin it into a company while creating a venture aimed at making a global impact.
We don’t charge fees for our services, but we do take a co-founding minority equity stake at incorporation, keeping us risk-aligned with the venture. We have a large team of Ph.D.s, researchers, and commercialization experts who work to create standout companies around that nascent IP, recruiting founding teams and introducing them to investors. We’ve built 16 companies in our portfolio at a rate of eight per year, so we should have over 40 deep tech companies within a few years.
How did you transition from communications to deep tech venture building?
I was founder and director of a communications agency focused on luxury brands and hospitality. Around 2010, when social media became prevalent, I scaled the agency internationally to about 15 to 20 people. Cambridge Future Tech approached me to consult on their PR and communications strategy. They said, “You’re not corporate or tech PR, and that’s why we like you. We’re not a tech company. We’re a people company, a startup that helps people start-up startups!”
I came into Cambridge Future Tech knowing nothing about deep tech specifically, but being based in Cambridge put me at the heart of the university’s science and technology ecosystem. I was appointed communications director and got deeply involved in the company’s strategy, including setting up new initiatives like the VC fund. I then exited my agency, brought some of my team into Cambridge Future Tech, and joined with a view toward being general partner at Future Tech VC.
Where do you source technology and how do you build teams around it?
We have a research team constantly communicating with professors, principal investigators, and academics across UK institutions. We’ve built the UK’s leading early-stage research and deal flow mechanism. We don’t just work with technology transfer offices (TTO). We find technology in universities that has never reached the TTO. Often these are from scientists who won’t leave their research positions, so the technology isn’t coming through traditional channels.
When we find promising technology, we’ll work with the TTO to spin it out. Sometimes technical founders join the journey. If not, they still get equity and might serve as advisors. But mainly we recruit specific talent with commercial experience to build and grow these companies. For example, with Literal Labs, which we spun out of Newcastle University, the professors work as advisors with equity, but we recruited Noel Hurley, former head of ARM’s CPU division, to lead the company. They just raised £4.7 million ($6.3 million) in pre-seed funding.
What are the unique challenges and opportunities for deep tech in the UK?
The biggest challenge is inconsistent university equity policies. There’s no standard across UK universities with some taking such large stakes that their spinouts aren’t VC-backable. We had to get 20 different VCs to contribute to a white paper to convince one university to permanently decrease their equity stake.
UK VCs also move much more slowly than their US counterparts. US VCs can diligence extremely quickly and send term sheets within a week. The UK process is often much slower, making it harder to raise funding for early-stage deep tech companies. Plus, the key market is often in the US. Many of our companies, like SAFE Autonomy and OmniBuds, chose to do Delaware flips and expand to the US for both market access and funding.
It’s great to build deep tech companies in the UK since staffing is cheaper and US VCs are interested in UK university spinouts. But the direction of travel is typically across the pond for scaling, which is unfortunate for the UK ecosystem.
Given your background in communications, what role does storytelling play in deep tech success?
The challenge with technologists is they’re incredibly passionate about their product but can’t always translate that into why it matters to the world. In communications our role is sometimes to ask: “Why should I care?” Too often, pitch decks go deep into technical details across five pages that no one can absorb, instead of addressing the real impact.
A pitch should be an elevator pitch that makes people want to ask more questions. I want to hear why your technology will change the world and why I should invest. An investor is a person with a chec book. You need to make that person stand up in their investment committee and fight for you. That means cutting through the noise and translating between brilliant technical people and the rest of the world, because that’s where you’ll actually make an impact.
The biggest mistake I see is getting too deep in technical details. On the first page of your pitch deck, I need to know exactly what problem you’re solving and why I should care. You need different versions of your deck for different audiences, and you need to connect personally. Don’t just fling decks via automation. Reach out as a human being.
What areas of deep tech are you most excited about for the new fund?
We’re really focusing on the future of compute and dual-use technologies, particularly in security. We’re strong in quantum-enabling technologies rather than quantum computing itself. I like companies that can span multiple applications. Construction tech is rather siloed, but sustainability can cross various technical pathways, broadening the market.
Our focus areas include novel AI applications, AI security, and energy. We’re getting significant international interest because of our access to UK university IP, which is less saturated than the US market. With our £30 million ($40 million) fund, we’re seeing particular interest from family offices where younger generations want exposure to alternative investments and deep tech but lack specific expertise. We’ve de-risked these ventures significantly, we’ve never had a company or fundraising round fail, which makes us an attractive entry point into deep tech investing.
How do you define deep tech?
Deep tech is a completely novel technology that stands alone to disrupt and transform markets. It’s not about operating within existing frameworks. It’s about creating an entirely new product that will make a real impact. With AI specifically, it’s not just applying AI to existing processes but creating fundamentally new approaches that couldn’t exist without that technology.
HAUS specializes in public relations and creative services for deep tech startups.
