This week saw the flotation of microchip designer Arm Holdings on the New York Stock Exchange. Arm is one of the key pillars of the’Cambridge Phenomenon’. It was founded in the early 1990s “with the team setting out to change the computing landscape from an old turkey barn in Cambridgeshire”. These days you will probably be familiar with the substantial Arm Campus on Fulbourn Road.
The flotation has generated a lot of press coverage about what valuation it was likely to achieve and what significance should be attributed to the decision to float on the NY Stock Exchange rather than in London, including a very accessible report in the Cambridge Independent.
The consensus seems to be that the flotation has been a great success – the company was valued at a staggering $54.4 billion (£43.6 billion) and according to the Daily Telegraph, “Staff have millions of restricted share units – compensation that converts to shares over time – according to company documents. It translates to an average reward of more than $400,000 for Arm’s 5,963 employees, although the figures include executives who are each likely to secure millions as well as former workers.” Indeed, Rene Haas, the chief executive, is set to receive a package of cash and shares worth $40m from the float.
There was one section of that report which really jumped out at me, a quote from Arm’s Chief People Officer:
“We are proud of our British heritage, our Cambridge heritage, and we shipped over to the Nasdaq a pub, and so in the Nasdaq studio there was a British pub serving cream teas and fish and chips and it shows how proud we are of where we’ve come from and our British roots.”
How heartening to hear that – despite its worldwide operation – its British identity, and specifically its Cambridge connection, is so highly valued by the company. I wonder if then, off the back of this flotation, Arm might be persuaded to set a precedent for other successful Cambridge companies to follow, by creating an endowment fund, similar to those enjoyed by Cambridge University colleges, for the long-term civic good of its home town?
The City Council has recently started to explore the possibility of a ‘Greater Cambridge Impact Fund’, providing an initial £200k seed funding from its own reserves, with the possibility of a subsequent £800k to be invested to leverage contributions from a variety of external sources, including both high net worth individuals and successful Cambridge companies. This may seem a novel route for a council to go down, but this graph from The Economist shows just how the local government funding gap has opened up since 2010, Authorities have had to try a variety of means of addressing that gap, sometimes with extremely damaging results.
What are the possibilities of the Impact Fund? Well, it has a stated ambition to raise between £6–15 million over a 12 year period. But let’s put that in perspective.
One hundredth of one percent (0.01%) of Arm’s $54.5 billion flotation value is $5.4 million. That would make a sizeable dent in the funding required to deliver the new Children’s Hospital planned for the Biomedical Campus, for example.
Even one thousandth of one percent (0.001%) would raise $540,000, enough to sponsor the Holiday Lunch Club programme for disadvantaged families, bring back the Big Weekend and keep our public toilets open.
Meanwhile, with this chapter in Arm’s story now closed, the media’s attention is turning to another of the Cambridge Phenomenon giants, Abcam. Abcam has been based in a striking HQ on the Biomedical Campus since 2019, but has an equally homespun ‘Cambridge’ back story as Arm, as founder Jonathan Milner explained:
“The most convenient way was to get on my bike with an ice bucket and go around all the labs and blag my way in and ask people if they wanted to buy these antibodies. It saved the company actually – if I hadn’t done that, Abcam certainly wouldn’t be here.”
Abcam’s Board are recommending that shareholders accept a takeover by US company Danaher which values the company at $5.7 billion. If the deal goes through, a thousandth of one percent (0.001%) here could perhaps ensure that the annual city fireworks on Midsummer Common aren’t the next sacrifice to balance the books.
I have commented many times on the lack of connection between the beneficiaries of the ‘Cambridge Phenomenon’ success stories, and those in the city who are not part of the ‘knowledge economy’. In March 2021, I did some research among people visiting the Queen Edith’s community food hub to understand how visible these success stories were to them. Out of 25 interviewees, 17 had heard of Astra Zeneca (but all in the context of the Covid jab, they weren’t aware AZ’s corporate HQ was a less than a mile away); 6 had heard of Arm (because they passed the Fulbourn Road campus); none of them had heard of Abcam.
The wealth being generated by this city is phenomonal. We need to be just as phenomenal in retaining it here and putting it to work for the greater good.