Pragmatic Semi raises $231m in Europe’s largest funding round
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Pragmatic Semiconductor has raised £182m ($231m) in what it says is Europe’s largest venture funding round to support further expansion of chip making in the UK.
The cash will be used to build its third and fourth fabrication lines at its Pragmatic Park facility in Durham using 300mm wafers. Over the next 5 years Pragmatic anticipates building at least eight manufacturing lines in the UK for its plastic chips.
Each line is capable of producing billions of chips for new applications across multiple sectors including consumer, industrial, healthcare and beyond. Other use cases include wearables, sensors and flexible controllers.
The significantly lower carbon footprint of Pragmatic’s semiconductor manufacturing compared to traditional silicon chip fabrication was cited by investors as a key factor.
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The first close of the Series D investment round was co-led by M&G and the UK Infrastructure Bank, which was the aim of the UK’s underwhelming semiconductor strategy. This raised £162m ($206m), and the company is planning a limited second close for key investors, of which £20m ($25m) additional investment is already allocated.
New investors include Northern Gritstone, Latitude and MVolution Partners, and existing investors such as British Patient Capital, Cambridge Innovation Capital and Prosperity7 Ventures (the diversified growth fund under Aramco Ventures).
Of particular interest is providing item level intelligence to trillions of fast-moving consumer goods via smart packaging that will improve reuse and recycling, transforming waste management, and enabling a circular economy.
“This successful Series D round is a clear testament to the massive opportunity for our innovative technology to enable item-level intelligence in virtually any object on the planet,” said David Moore, Pragmatic’s CEO.
“Our global customers value our ultra-thin and flexible form factor, our breakthrough low cost of customisation and rapid production cycles, as well as the lower environmental footprint compared to silicon. Scaling our manufacturing capacity on the UK’s first ever 300mm wafer production lines at our site in Durham will enable us to deliver hundreds of billions of chips to customers worldwide over the coming decade.”
“We also see demand from customers for our unique Fab-as-a Service deployment model. This is a modular semiconductor manufacturing approach that provides customers with access to an efficient, localised and secure supply of chips through a dedicated production facility wherever they need it.”
John Flint, CEO of UK Infrastructure Bank, said: “The Bank has an important role to play in unlocking finance to scale up domestic supply chains, like semiconductors, which are critical to the UK’s transition to net zero. Our investment in Pragmatic backs a British business to accelerate development of a first-of-a-kind technology which not only cuts the carbon emissions of semiconductor production, but which will drive growth in the local economy in the North-East.” Niranjan Sirdeshpande, Global Head of Investments, M&G Catalyst Strategy, said: “The UK is blessed with a rich seam of enterprising and disruptive tech firms, but significant amounts of patient capital are needed to help companies like Pragmatic to expand and hone their operations – this is where M&G can help. We developed Catalyst to play a leading role in enabling businesses to scale their operations, provide expertise and partner with them all the way to success. Long term capital put to work in this way not only supports economic growth but can capture value for people’s pensions and savings as we transition to a more sustainable economy.”
Erik Langaker, Pragmatic’s Chairman, added: “In a challenging investment environment, this capital raise is a fantastic recognition of the strength of the company and the value of its unique technology. With this funding, Pragmatic will be able to scale its foundry capacity to produce billions of chips to meet the demand from global, blue-chip organisations that are developing innovative new use cases only possible because of Pragmatic’s flexible integrated circuits.”
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