SCI Semiconductor raises GBP £5m to boost chip output

SCI Semiconductor has raised GBP £5 million to increase chip production after strong customer demand.

The Sheffield-based company said the oversubscribed round was led by PXN Ventures and Mercia Ventures through the Northern Powerhouse Investment Fund II. Osney Capital, Black Opal Ventures and private investors also participated.

SCI develops memory-safe computer chips, a type of hardware designed to reduce a class of software flaws linked to many cyber attacks. It has already fabricated its first devices and secured more than GBP £2 million in orders.

The company has also won government contracts worth GBP £7.7 million and agreed partnerships with Google Research and Microsoft. It was founded in 2022 by Haydn Povey, Krishna Anne and Dr David Chisnall, alongside academics from the Universities of Cambridge and Manchester.

The latest investment follows an earlier GBP £2.5 million round led by NPIF II and Mercia Ventures. SCI now employs 35 staff across Sheffield and Cambridge.

Cyber focus

SCI's pitch rests on memory safety, which addresses weaknesses created when software can access computer memory in unsafe ways. Such flaws have become a growing concern for governments and infrastructure operators because attackers can exploit them or they can trigger wider system failures.

Its ICENI chips are based on CHERI, a government-backed framework for memory-safe technology. SCI has also been appointed a core supplier in the UK government's Accelerated CHERI Adoption Programme.

The company's chips are designed and packaged in the UK, while fabrication takes place in Germany. SCI said the products could also help organisations meet parts of the reporting requirements under the European Cyber Resilience Act.

The fundraising comes as cyber security groups warn that advances in artificial intelligence could expose software flaws more quickly and at greater scale. SCI argues that hardware-based protections can reduce reliance on software patching alone.

Haydn Povey, Chief Executive Officer of SCI Semiconductor, linked the investment to rising concern about software vulnerabilities and the impact of AI-generated code.

"The problem of memory safety is finally being taken seriously. As AI is identifying hundreds of critical vulnerabilities, it is clear that huge swathes of technology are open to attack. Additionally, with so much code generated by AI, the question is how much of it is fit for purpose and what risk that could pose to systems. Memory safe technology helps overcome these challenges. Since unveiling our ICENI chip earlier this year, demand has been overwhelming. The funding will enable us to step up production and develop a new generation of chips here in the UK," said Povey.

Investor backing

For investors, the deal adds to a run of UK cyber and deep-tech funding aimed at areas with government and industrial demand. It also underlines continued interest in companies tied to national security, critical infrastructure and semiconductor supply chains.

Mercia Ventures said the business had moved quickly from development to commercial traction. "SCI Semiconductor brings together some of the leading minds in the industry. They have developed an elegant solution to a trillion-dollar problem, one that has so far eluded other players, and the business has quickly gained traction. We are pleased to continue supporting them and look forward to seeing them go from strength to strength," said Schaffer.

PXN Ventures framed the investment around cyber risks facing essential services and industrial sectors. "We're proud to be backing the SCI Semiconductor team, who are doing incredibly important work addressing rising threats to critical infrastructure and other key sectors with hardware-level cyber security, particularly as these threats become more sophisticated," said Young.

The British Business Bank said the transaction reflected the role of the Northern Powerhouse Investment Fund II in backing regional companies. "Through the Northern Powerhouse Investment Fund II, we are committed to improving access to finance for ambitious businesses across the North. Supporting companies like SCI Semiconductor demonstrates how NPIF II is helping to scale innovative, high-growth businesses, supporting the UK's Modern Industrial Strategy while strengthening key technology clusters in regions such as South Yorkshire," said Newbould.

Osney Capital, a specialist seed investor in cyber security, said SCI matched its focus on UK founders tackling security problems with commercial potential. "SCI Semiconductor is exactly the type of UK company Osney Capital seeks to support: world-leading technologists tackling global cyber security problems with commercial energy, focused on execution. Memory safety is a genuinely massive opportunity and we are delighted to be working with Haydn and the broader team," said Wilkes.

SCI said it plans to create 15 more jobs over the next year as it expands production and develops further chip designs in the UK.