Optalysys, the developer of a revolutionary photonic processing technology, has raised £21 million in Series A funding.

The round was led by Lingotto, an investment management company owned by Exor N.V., imec.xpand and Northern Gritstone, with additional investors to follow. 

The investment will allow the company to advance its Enable photonic computing technology to unlock a new form of secure processing known as fully homomorphic encryption (FHE).

FHE is a form of quantum-secure cryptography that closes the last vulnerability in cloud systems: unlike other encryption methods, FHE does not require the data to be decrypted before it can be processed, allowing confidential or sensitive data to be sent along untrusted networks, or to be worked on by multiple parties without ever exposing the data itself.

However, the computational burden attached to this poses significant challenges, with a single process on encrypted data taking around one million times longer than on unencrypted data, making it near impossible to deploy at scale with conventional computer processors.

Optalysys’ approach addresses this bottleneck. The company has created an advanced photonic semiconductor which accelerates the FHE process, allowing encrypted data to be processed at similar speeds to its unencrypted form. This brings hope of deploying FHE at the scale demanded by the largest secure data applications.

With potential use cases across most major industries, including finance and banking, manufacturing, healthcare and machine analytics, research firm Global Market Insights estimates that the global FHE market is set to grow to $53 billion by 2030.

The goal is for Optalysys to become the world’s leading provider of confidential and private computing leading to the Encrypted Data Centre, where today’s trust and security issues of sending data to the cloud become consigned to history. The company’s technology has already attracted the attention of financial institutions and has applications across a wide range of industries, from financial fraud detection to advanced processing of medical data.

The investment will allow the company to launch its technology on a cloud-based service model, in partnership with system integrators and service providers. Initial photonic systems developed by Optalysys will also be made available to end-users via an Accelerator program – ahead of the first high-speed Enable chips being produced within 24 months. The funding will also be used to expand its team in England, Europe and the US.

Uniting for success amid Yorkshire’s tech revolution

For co-founders Dr Nick New and Robert Todd, this marks the culmination of over 20 years’ development in optical computing, during which they have relocated from Cambridge to Leeds to draw on the city’s resources and the University’s strong expertise in the field.

“Fully homomorphic encryption has the power to unlock the full value of data – but despite its advantages, it is currently unviable for anything beyond basic processes,” said CEO Dr New. 

“This is where Optalysys comes in. Our Enable technology allows us to turbo boost the workflows and address the underlying bottlenecks that hold FHE back.

“It is a very exciting moment for Optalysys and it’s fantastic to have the backing of such prestigious deep tech investors to help us reach our goals. We have turned optical computing on its head. What’s more, FHE is just the starting point for where our technology can go.”

Ashish Kaushik, partner at Lingotto, said: “Optalysys presents a groundbreaking semiconductor technology to reduce energy consumption, boost processing power, and enhance data security. 

“The capability to unlock the power of FHE with their photonic computing technology will enable new markets with advances in encrypted AI. We look forward to working with Nick, Rob, and the team to bring a new level of trust and security to how we use our data.”

Duncan Johnson, CEO of Northern Gritstone, added: “Optalysys has the Holy Grail of privacy technologies, providing a solution that will close the last major vulnerability in cloud and remote processing. 

“Nick and Rob’s decision to move the company to Leeds validates Northern Gritstone’s belief that the thriving innovation hub in the North of England will attract fast-growing technology companies to the region. 

“We are thrilled to support them in their journey as they seek to transform the data protection market and create another Northern success story.”

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