Nearly six in ten companies that started in a British university have founders who came from other countries, according to a report recently released by Creator Fund, Europe’s first venture capital fund that specializes in backing university entrepreneurs.
The report called the “State of Student Startup”, which takes a closer look at what inspiring student founders across the UK are up to, is based on the analysis of 545 startups the Creator Fund team of student investors met in the previous academic year. In the last eight months, Creator Fund has met with over 800 startups from 94 universities.
Majority have foreign founders
The report suggests that international students seem to be fond of entrepreneurship. While international students account for less than 20 percent of the total student population, 57 percent of student-run startups in UK universities have a foreign founder.
Student startups are more diverse compared to startups in the general business landscape, with forty-three percent of student startups have at least one founder from a black, Asian or minority ethnic (BAME) background, and 40 percent have at least one female founder. This suggests that BAME students have a strong entrepreneurial mindset, as they just make up roughly 21 percent of the student population in the UK.
The most diverse teams come from Oxford and Cambridge, where 61 percent of the members have at least one BAME founder.
Cambridge is leading the way
Although London is the center of startup activity in the UK more generally, only 38 percent of student-led businesses are started in its universities. Cambridge sits on top of the list for entrepreneurial activity with 71 startups founded, followed by Imperial College London with 50 startups and Oxford 48. London, Oxford, and Cambridge – the so-called “Golden Triangle” of universities – account for 60 percent of total student startups.
Scotland also hums with student entrepreneurial activity, producing 15 percent of student startups despite only receiving 2 percent of the total venture capital in the UK. Creator Fund believes undergraduate startup activity in Scotland is particularly strong due partly to the excellent enterprise teams in universities such as Edinburgh and Strathclyde.
Healthcare is priority
Based on the report, students appear to be focusing their efforts on areas that benefit a wider population and moving away from more traditional sectors. Healthcare is the top choice among student entrepreneurs, accounting for 16 percent of university startups, followed by foodtech and agritech with 10 percent.
Postgraduates are the ones most likely to confront healthcare challenges, with 81 percent of healthcare startup founders are taking up masters or PhDs. As universities in the UK have been leading the fight against COVID-19, several of its startups have veered from their existing models to help tackle the virus.
According to Creator Fund, even though a lot of students have been reading politics, they have seen few startups in the govtech arena, nor did they see a lot of legaltech resulting from law programs. Students, they added, find software more interesting than hardware.
Postgraduates more likely to be founders
The report found that postgraduates are more likely to launch a startup than undergraduates. Just 30 percent of startup founders are undergraduates, while 40 percent are taking up masters and 26 percent PhDs.
Creator Fund believes that factors contributing to the low rate of undergraduate founders include shorter degrees, as many undergraduates study for just three years in the UK compared to four in the US, and having less exposure to other ideas outside their course.
Being surrounded by talent on campus, student founders prefer to start companies with other people. Just 21 percent of students started a company by themselves, while 13 percent of student startups have four founding members, and 35 percent have three founders. Creator Fund didn’t meet a single company at Oxford that had only one founder.