Optalysys, a photonic computing company based in Leeds, UK, has raised US $31 million in a series A round led by Northern Gritstone, with participation from imec.xpand and Lingotto Horizon, and with support from the UK’s government National Security Strategic Investment Fund. The firm plans to use the investment to accelerate commercialization of its proprietary photonic chips and finance its expansion into the United States.

As demand from AI and cloud workloads continues to climb, investors are backing alternatives to conventional electronic computing that promise higher throughput with lower energy cost. “We are at a defining moment in the evolution of computing. Photonic computing opens up fundamentally new capabilities, allowing data to be moved and processed with far greater speed and efficiency,” said Nick New, CEO and cofounder of Optalysys.

Traditional silicon processors that move and manipulate information using electrons typically routed through waveguides. Unlike silicon photonics, photonic computing uses light to transmit data at high bandwidths with potentially lower heat and power penalties.

“We are at a defining moment in the evolution of computing. Photonic computing opens up fundamentally new capabilities, allowing data to be moved and processed with far greater speed and efficiency.” —Nick New, Optalysys CEO and cofounder 

Optalysys’ architecture integrates data movement and processing on the same chip, combining silicon photonics with digital electronic circuitry. The goal is to handle workloads that are especially demanding in terms of speed, bandwidth and energy use such as generative AI as well as advanced cryptography.

The company, which was founded in 2023, highlights security-focused computing as a near-term differentiator. In particular, it points to fully homomorphic encryption (FHE), which is a method that allows computations to be performed on encrypted data, so the system never has to decrypt sensitive information just to process it.

Optalysys positions photonics-enabled acceleration as a way to make these privacy-preserving methods more practical for everyday use in cloud and enterprise environments, where FHE can be too slow and resource intensive. Previously, the company had introduced proprietary servers aimed at encrypted blockchain applications, presenting that product line as an early route to market while its photonic chips continue to mature.

The announcement comes as the UK government renews its push to accelerate growth and innovation in the north of England. In its recent “Case for change” document, the government outlines plans to strengthen connectivity and develop a Northern Growth Corridor, centered on major rail upgrades linking city regions across the region and strengthening connections between key northern hubs. For deep-tech firms in towns such as Leeds, the renewed emphasis on infrastructure and building high-tech clusters could reinforce the region’s ambition to scale AI- and photonics-driven industries.