Huawei buys access to UK innovation with Oxford stake

Oxford Sciences Innovation is the largest fund dedicated to academic spin-offs in the world. Photo / Getty Images

Huawei has bought a stake in the company that commercialises research at Oxford university, giving the Chinese telecoms maker access to some of the most promising early stage technology developed by British academics.

Oxford Sciences Innovation is the largest fund dedicated to academic spin-offs in the world. It has raised £600m in four years from 70 shareholders led by the university and including Google's venture arm GV, Sequoia Capital and Temasek, the Singaporean sovereign wealth fund.

Records filed at Companies House in July show that Huawei Technologies Cooeperatief, a Dutch arm of the Chinese company, acquired 4.1m shares over the previous year, roughly a 0.7 per cent stake.

The investment was not publicly announced and Huawei's name is not featured on the OSI web site as a backer.

Buying into OSI will give the Chinese telecoms company, which has been blacklisted by the US as a threat to its national security, a view of OSI's portfolio companies and intellectual property.

Its investment came shortly before Oxford university cut its ties with Huawei, saying it would not accept any more research funding or philanthropy from the Chinese company. A spokesman said Oxford had taken the decision "in light of public concerns raised in recent months surrounding UK partnerships with Huawei" and that the policy still stands.

OSI has what one venture capitalist called "a stranglehold" on research developed at Oxford university and has backed early stage companies in the life sciences, software, industrial technology and computation fields. Its portfolio companies include Oxford Nanoimaging, Vaccitech, and Oxford Flow.

It appointed Patrick Pichette, Google's former finance director, as its chairman, and Charles Conn as its chief executive in February.

Some shareholders in OSI work closely with portfolio companies to accelerate their development, identify management and connect them to potential customers. A spokesperson for the fund said that Huawei would not get any "special access" to companies above other investors.

"The OSI has raised over £600m in investment for UK science and technology from a wide range of corporates and investment funds, including GV, Temasek, Legal & General and the Wellcome Trust. Huawei are a small investor in the OSI. They do not have any preferred or special access to our companies or their underlying technology," the spokesperson said.

Huawei has one of the largest research budgets in the world and has backed numerous early stage companies in the UK and across the globe. But US pressure on the company has started to have an effect and Futurewei, its US beachhead that works closely with the University of California, Berkeley, was forced to lay off hundreds of workers this year.

Huawei met with a number of early stage funds over the course of the summer according to a person with direct knowledge of the talks but struggled to land investments outside the Oxford deal.

A spokesperson for Huawei said that the investment in OSI was part of its "long term commitment to the UK". "We continue to support OSI in its ambition to bring new ideas to the world."

Neil Woodford sold his £55m stake in OSI earlier this year.

Written by: Nic Fildes

© Financial Times 2019