Northern Gritstone invests £7.5 million in Pragmatic Semiconductor

Pragmatic’s £162 million Series D round is the largest ever European semiconductor venture funding round. 

Northern Gritstone has made a £7.5 million Series D investment into Pragmatic, a manufacturer of flexible Integrated Circuit (IC) semiconductors.

The £162 million Series D funding round is co-led by M&G Catalyst and UK Infrastructure Bank and includes existing investors Prosperity7 Ventures (the diversified investments fund under Aramco Ventures), British Patient Capital and Cambridge Innovation Capital. Pragmatic is planning a limited second close for key investors, of which £20 million additional investment is already allocated, bringing its total secured capital to £182 million.   

Founded by Scott White and Richard Price in 2010, Pragmatic acquired IP from the University of Manchester upon its creation and has established its manufacturing plant at Pragmatic Park in Durham.  

The company has developed a patented process for ICs manufactured from metal oxide rather than traditional silicon. It uses thin-film semiconductors to create flexible ICs that are thinner than human hair, enabling new applications not possible with silicon chips. 

The global semiconductor industry is expected to grow to $1,380 billion by 2029, according to Fortune Business Insights, as the use of semiconductors in everyday appliances increases.

Pragmatic’s manufacturing process uses substantially less energy and water than conventional silicon chip production, meaning that its production costs are up to ten times lower, while also significantly reducing the process’ carbon footprint. 

Pragmatic’s flexible ICs can be embedded into a wide range of everyday objects, with potential uses in radio frequency identification (RFID) and near field communications (NFC). RFID tags have a wide range of uses across different industries, such as tracking goods in supply chains to reduce food waste and better identifying packaging and materials to improve recycling processes. 

Pragmatic has previously secured over $180 million in funding from venture capital firms and corporate investors, such as Arm and Avery Dennison, which both hold non-executive board positions with the company. 

The Series D investment will enable Pragmatic to accelerate its expansion plans in the UK to meet the growing demand for its unique technology from customers worldwide. This includes building its third and fourth fabrication lines at its Pragmatic Park facility in Durham, which are each capable of producing billions of chips. 

Within the next 5 years, Pragmatic plans to build at least eight manufacturing lines in the UK, creating over 500 highly skilled jobs in the North East and Cambridge, where it has headquarters. 

Northern Gritstone CEO, Duncan Johnson, said: “With intellectual property acquired from the University of Manchester and a state-of-the-art production line in Durham, Pragmatic represents some of the brightest technology from across the North of England. Its strong impact agenda and desire to create high-value jobs in the region aligns with Northern Gritstone’s ‘profit with purpose’ mission and desire to create a thriving innovation community. We are excited to be investing at this later stage and are optimistic about the growth that Pragmatic can deliver in the next few years as the use of its chips expands.” 

Pragmatic CEO, David Moore, said: “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. 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.”