Season 4, Post 30: A day in Silicon Fen
Although over 5,000 miles separate California from the British university city of Cambridge, there are strong similarities between the two regions. Both are famous for their innovation culture as well as having the term ‘silicon’ prefixed to their names. For your London-based author, it is however, markedly easier to get to the former – just an hour away by train – than the latter. With a Silicon Valley visit already ticked off the list earlier this year, this week saw a trip to Silicon Fen, so named given Cambridge’s proximity to the Fenland region of England.
Cambridge boasts over 1,000 start-ups on its doorstep and received more venture capital funding than any city other than London in the UK last year. Beyond its world-class university, the legacy of innovation dates to the foundation of a Science Park, a first in Britain, on the outskirts of the city in 1970. Proximity to, and cheaper rents than, the capital have also helped. In recent years, the city has spawned several famous businesses including ARM, Autonomy, CSR and Domino Printing (all of which achieved listings and were then eventually acquired by larger rivals).
One other recently listed local success story is Darktrace. The business, founded in 2013, floated on the London stock market last year. Despite solving a global problem (cybersecurity) and having customers across the world, Darktrace has always had its main R&D centre in Cambridge. It was one of the stops on our trip to the city. In our conversation, Darktrace said it saw part of its responsibility as “bringing more people into tech.” It is broadly discipline-agnostic in terms of whom it hires into its research department, seeking simply to recruit people who sit “at the intersection of creativity and capability.” Darktrace has, in our view, succeeded in creating a unique business within the cyber space, solving problems using bottom-up artificial intelligence.
Another highlight on our tour round Cambridge was a visit to Sentec, a unit of Xylem, one of the world’s largest water-tech businesses. We made the case for bringing greater digitalisation to the water sectorearlier this year, and it was hence refreshing to hear how this is being done practically. The innovation the business has achieved to-date, it believes, is largely a function of its people, around 70 of whom are based in Cambridge. There is a conscious policy to sit, say, engineers next to physicists at Sentec to foster a greater cross-pollination of ideas. Part of the motivation for working at the business, apparently, is not just the culture but the fact that scientists get to see their ideas turned into tangible products that are also seen as integral in driving improved sustainability.
27 July 2022
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Darktrace. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
Alex Gunz, Fund Manager
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