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27 Jan 2026
UK-based photonic computing startup has developed hardware for encrypted blockchain applications.
Optalysys, a 2013 startup in the UK developing photonic computing technology for applications in artificial intelligence and advanced encryption, says it has raised £23 million in a series A “extension round”.
The latest funding was led by Northern Gritstone and included participation from imec’s “xpand” investment wing, Italy’s Lingotto Horizon, and the UK government’s National Security Strategic Investment Fund (NSSIF).
Leeds-based Optalysys said that the injection of cash would be used to accelerate the commercialization of its proprietary photonic chips, and also support a planned expansion into Silicon Valley.
“As AI and cloud workloads continue to grow exponentially, conventional electronic computing is reaching its physical limits,” states the firm.
“Optalysys’ unique approach integrates data movement and processing on a single chip, combining silicon photonics with cutting-edge digital technologies to deliver immense computational power whilst reducing the carbon footprint of today’s energy-intensive digital methods.”
The technology has previously been used to aid neural networking, DNA processing, and "big data" challenges.
‘Fully homomorphic encryption’
Founded by CEO Nick New and CTO Robert Todd, Optalysys explains that it is developing a programmable, high-density layer using photonics that is designed to run compute-intensive workloads, including for generative AI and “post-quantum” algorithms, and forming a foundation for next-generation cloud infrastructure.
One key application is what is known as “fully homomorphic encryption (FHE)”, an approach that allows data to be processed securely while remaining encrypted - seen as an increasingly important capability for secure cloud and enterprise computing.
Early forms of that technology can be found in the firm’s “LightLocker” server products (see video below) that were launched last year and are claimed to represent the world’s first dedicated hardware solution designed for encrypted blockchain applications.
“We are at a defining moment in the evolution of computing,” said New. “Photonic computing opens up fundamentally new capabilities, allowing data to be moved and processed with far greater speed and efficiency.
“This investment validates both the scale of the opportunity ahead and our ability to execute against it. It allows us to expand into new markets and take an important step towards making photonic computing a mainstream part of cloud infrastructure.”
Todd added: “Recent acquisitions in the semiconductor industry have highlighted the role that photonics can play in addressing the limits of electronic computing, particularly in processing capability and power consumption, resulting from the demands of training and running even larger AI models.
“Optalysys’ approach uniquely combines data movement and compute within the same package. Expanding to the US is an exciting and natural next step for us, so that we can tap into its strong photonics ecosystem and the immense talent located in Silicon Valley.”
Investor pedigree
Established in 2018 with the aim of creating tech “unicorns” from UK-developed technologies, the NSSIF program targets several high-priority application areas enabled by advanced photonics, including AI, quantum, semiconductors, and space communications, and recently invested in the University of Cambridge spin-out Nu Quantum.
“We cannot overstate the importance and value of our relationship with NSSIF,” New commented. “We have found the investment process to be extremely straightforward, with regular and clear communication.
“Now the round is complete, we very much look forward to further developing our relationship with the team and building our proposition into one of key importance for the UK and the international stage.”
Other early-stage companies in the NSSIF portfolio with photonics expertise include quantum gravimetry startup Delta-g, Canada’s Photonic, California-based PsiQuantum, and Orca Computing.
Lingotto Horizon is a venture fund set up by Exor, the holding company controlled by the Agnelli family and better known for its ownership of several Italian car brands including Fiat and Ferrari, as well as the Turin-based football club Juventus.
In May 2023 George Osborne, who was the UK government’s Chancellor of the Exchequer between 2010 and 2016, was appointed as a non-executive director of Lingotto.
Corporate video: LightLocker Node server:
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