Home Estate Planning Another UK snub: Cambridge spin-out eyes New York IPO as unicorn status beckons

Another UK snub: Cambridge spin-out eyes New York IPO as unicorn status beckons

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Life sciences startup Nuclera has said it is eyeing up a public listing in New York in the next five years as it approaches unicorn status. 

The Cambridge university spin-out helps accelerate drug discovery by rapidly finding the correct proteins needed to create new medicines and vaccines. 

Nuclera says it can reduce the lengthy process, which can take months or even years in some cases, down to days. 

Earlier this month, serial life sciences investor and former chief of biotech company Abcam, Jonathan Milner, said Nuclera has the potential to be Cambridge’s next unicorn – a privately held startup with a value over $1bn.

It would join the likes of chip designer Arm and cyber security company Darktrace. Milner agreed to become a non-executive chair of Nuclera’s board at the start of this year. 

Nuclera founder and chief executive Michael Chen told City A.M. that his company is working to achieve unicorn status from an exit perspective, either through an initial public offering (IPO) or from either being bought out by a larger company.

He said: “Our ambition is to achieve that unicorn status in the next five years and we think we’re on a trajectory to be able to reach that.”

“Our ambition is to IPO or, if the public markets are not open, we’d be very happy to be part of a larger portfolio or a larger company.

“Being part of one of these larger companies also means that you can better serve your mission to your customers because they have more operational capabilities,” he added. 

Chen said he will be “opportunistic” and weigh all the options available. 

But he suggested the Cambridge company is likely to follow in the footsteps of chip giant Arm and pursue New York as its listing place of choice over London.

Most biotech companies will float on Nasdaq in the US due to the availability of sophisticated biotech investors who understand the biotech market and are used to dealing with that on Nasdaq and, to a lesser extent, the New York Stock Exchange.

“I can only speak in hypothetical terms,” Chen said, “perhaps the London Stock Exchange will look incredibly attractive in three to five years.”

Nuclera’s main office in Cambridge has a team of around 90, with an additional smaller office in Boston in the US.

Over the past 18 months, London’s public markets have faced a bruising period, marked by a series of take-private transactions, largely orchestrated by private equity firms. Valuations in London have trailed behind those of competitors listed on global exchanges, placing pressure on the market.

Chen said there are “certainly headwinds” in the UK tech scene right now. 

“We saw that 2021 was a time of excess, where a lot of companies raised huge amounts of money at tremendous private paper valuations,” he explained. 

“And then we’ve seen a return to fundamentals in 2022, 2023 and beyond where you’re really being judged more so by your orders, by your revenue, by how you’re able to translate your story into financial performance, or a metric that investors care about.

“I think that’s a healthy return to fundamentals,” Chen said.

Nuclera’s main investors include RT partners, M&G Catalyst, Amadeus Capital Partners and Verve Ventures and several angel investors. 

Nuclera, which has raised $83m (£65.3m) in funding to date, has partnerships with Google Cloud’s artificial intelligence (AI) programme AlphaFold2 and Cambridge AI startup Deepmirror.

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