• Funding will allow the company to advance its Enable photonic computing technology to unlock a new form of secure processing known as Fully Homomorphic Encryption (FHE)
• FHE is a form of quantum-secure cryptography that preserves the structure of data even when encrypted

17 July 2023 – Leeds – Optalysys, the developer of a revolutionary photonic processing technology, has announced a £21 million Series A funding round led by Lingotto (an investment management company owned by Exor N.V.), imec.xpand, and Northern Gritstone, with additional investors to follow. The investment will allow the company to advance its Enable photonic computing technology to unlock a new form of secure processing known as Fully Homomorphic Encryption (FHE).

FHE is a form of quantum-secure cryptography that closes the last vulnerability in cloud systems: unlike other encryption methods, FHE does not require the data to be decrypted before it can be processed, allowing confidential or sensitive data to be sent along untrusted networks, or to be worked on by multiple parties without ever exposing the data itself.

However, the computational burden attached to this poses significant challenges, with a single process on encrypted data taking around one million times longer than on unencrypted data, making it near impossible to deploy at scale with conventional computer processors.

Optalysys’ approach addresses this bottleneck. The company has created an advanced photonic semiconductor which accelerates the FHE process, allowing encrypted data to be processed at similar speeds to its unencrypted form. This brings hope of deploying FHE at the scale demanded by the largest secure data applications.

With potential use cases across most major industries, including finance and banking, manufacturing, healthcare and machine analytics, research firm Global Market Insights estimates that the global FHE market is set to grow to $53 billion by 2030.

The goal is for Optalysys to become the world’s leading provider of confidential and private computing leading to the Encrypted Data Centre, where today’s trust and security issues of sending data to the cloud become consigned to history. The company’s technology has already attracted the attention of financial institutions and has applications across a wide range of industries, from financial fraud detection to advanced processing of medical data.

The investment will allow the company to launch its technology on a cloud-based service model, in partnership with system integrators and service providers. Initial photonic systems developed by Optalysys will also be made available to end-users via an Accelerator program – ahead of the first high-speed Enable chips being produced within 24 months. The funding will also be used to expand its team in England, Europe and the US.

For co-founders Dr Nick New and Robert Todd, this marks the culmination of over 20 years’ development in optical computing, during which they have relocated from Cambridge to Leeds to draw on the city’s resources and the University’s strong expertise in the field.

Dr. Nick New, Co-Founder and CEO of Optalysys, said: “Fully Homomorphic Encryption has the power to unlock the full value of data – but despite its advantages, it is currently unviable for anything beyond basic processes – this is where Optalysys comes in. Our Enable technology allows us to turbo boost the workflows and address the underlying bottlenecks that hold FHE back.

“It is a very exciting moment for Optalysys and it’s fantastic to have the backing of such prestigious deep tech investors to help us reach our goals. We have turned optical computing on its head. What’s more, FHE is just the starting point for where our technology can go.”

Ashish Kaushik, Partner at Lingotto, said: “Optalysys presents a groundbreaking semiconductor technology to reduce energy consumption, boost processing power, and enhance data security. The capability to unlock the power of FHE with their photonic computing technology will enable new markets with advances in encrypted AI. We look forward to working with Nick, Rob, and the team to bring a new level of trust and security to how we use our data.”

Cyril Vančura, Partner at imec.xpand said: “We are at the cusp of a new era of data sharing, and in the future the biggest opportunities will lie in enabling data sharing across institutions and efficient data processing across industries without compromising data security, confidentiality, and privacy. Optalysys is developing the key hardware component which will enable this new paradigm of secure data sharing. We are thrilled to support the company in developing this novel technology.”

Duncan Johnson, CEO of Northern Gritstone, said: “Optalysys has the Holy Grail of privacy technologies, providing a solution that will close the last major vulnerability in cloud and remote processing. Nick and Rob’s decision to move the company to Leeds validates Northern Gritstone’s belief that the thriving innovation hub in the North of England will attract fast-growing technology companies to the region. We are thrilled to support them in their journey as they seek to transform the data protection market and create another Northern success story.”

The company was supported by Mills and Reeve and advised by KPMG. The investors were advised by Taylor Wessing.

Notes to Editors

About Optalysys

Optalysys is a deep-tech company which develops a revolutionary photonic processing technology to unlock a new form of secure processing known as Fully Homomorphic Encryption (FHE). Based in Leeds, Optalysys was formed in 2013, having developed from co-founders, Dr. Nick New and Robert Todd’s work for Cambridge Correlators, a company spun out of Nick’s PhD research on Optical Computing at the University of Cambridge.

Optalysys made a key breakthrough three years ago, when Nick and Robert’s research into accelerating AI models led them to pivot towards chip-level silicon photonics from the communications industry. This combined the benefits of optical transport and processing by placing the optics at the heart of the electronics, making them the building blocks of much larger, high-precision functions.

About Lingotto

Lingotto Investment Management LLP (Lingotto) is an independent and entrepreneurial investment management company based in London. It is wholly owned by Exor N.V., one of Europe’s largest diversified holding companies, and is authorised and regulated by the Financial Conduct Authority. Its purpose is to deliver attractive long-term returns through a complementary, differentiated, and unique investment approach. It provides talented investment professionals a home in which they can pursue their passion for investing through an attractive combination of autonomy and structured support. More at www.lingotto.com

About imec.xpand

imec.xpand is an early stage and growth venture capital fund with a game-changing approach to turn hardware driven nanotechnology innovation into successful global companies. The fund is independently managed by a team of entrepreneurs, seasoned venture capitalists and business experts and is targeting ambitious tech start-ups that meet all the criteria to become a successful, scalable venture with the potential to change the world. imec.xpand will boost those ventures by supporting them operationally and financially from seed to exit, by enabling capex light innovation in a capex heavy environment and by giving them access to the unique imec knowledge, expertise, network and state of the art infrastructure. 

For more information about imec.xpand please visit us on www.imecxpand.com.

About Northern Gritstone

Northern Gritstone is a groundbreaking investment company, which is dedicated to supporting the commercialisation of academic spin-outs and IP-rich businesses based in the North of England.

Launched in July 2021 by the Universities of Leeds, Manchester and Sheffield, it was founded with the philosophy of Profit with Purpose, combining strong returns for investors with wider positive, societal and economic impact, including supporting Levelling Up and high-skilled job creation in the North of England.

The company announced its first close of £215 million in May 2022 and secured a further capital commitment of £30 million from British Patient Capital in March 2023. It is dedicated to financing companies in some of the UK’s fastest growing sectors such as advanced materials, energy, health technology and cognitive computation and has already made 10 investments in some of the UK’s most exciting future science and technology-enabled businesses.

For more information please go to: https://northern-gritstone.com/