01 Dec 2023
UK Semiconductor Pioneer Secures £200 Million Boost from Diverse Backers
A rapidly expanding semiconductor manufacturer based in the United Kingdom is in the final stages of securing a £200 million funding boost from prominent investors, including the renowned asset management firm M&G.
Sources familiar with the matter have disclosed that Pragmatic Semiconductors, known for producing cost-effective microchips utilised in various applications like packaging and apparel, is on the verge of concluding a substantial capital-raising effort supported by funds from Saudi Arabian sources.
Insiders in the financial district revealed that a significant portion of the new capital would be contributed by M&G's Catalyst fund, which specialises in technology-oriented enterprises.
Principle Equity Ventures, an affiliate of the Saudi energy giant Aramco, provided backing for Pragmatic’s most recent equity offering towards the end of last year. According to an insider, either Principle Equity Ventures or Aramco themselves have committed to participating in this latest round.
The UK Infrastructure Fund and Northern Stone Capital, a venture originating from a university, are reportedly among the new stakeholders in the enterprise. An anonymous source mentioned that the transaction, anticipated to value Pragmatic at £300 million prior to the infusion of funds, is slated for announcement in November.
This capital infusion will represent a substantial display of confidence in a company swiftly emerging as a pivotal contender in the United Kingdom's semiconductor sector. Pragmatic operates from a sprawling 15-acre facility in Durham and has a burgeoning presence in Cambridge, where its headquarters are situated.
Furthermore, the company has aspirations to augment its manufacturing capacity in the United States. However, earlier this year, it categorically denied any intentions of relocating from its British domicile.
The microchips manufactured by Pragmatic are produced sans silicon and yield integrated circuits even thinner than a strand of human hair.
Founded in 2010 by Scott White, a seasoned technology entrepreneur, the CEO mantle was passed on to industry stalwart David Moore earlier this year.
The surge in interconnected devices worldwide has sparked an exponential surge in the demand for sophisticated microchips, propelling companies like Nvidia to stratospheric heights and attaining a valuation of £823 billion, crossing the momentous $1 trillion threshold.
Current stakeholders in the company include Arm, the chip designing firm which recently marked its debut on the New York stock exchange, and Britannic Growth Capital, an offshoot of the UK Business Investment Bank. Unveiling its £103 million Series C funding round in December of last year, Pragmatic underscored the "strategic significance of its semiconductor technology platform at a juncture when governments across the globe are prioritising secure command of supply chains for pivotal electronic components."
In May, Prime Minister Rishi Sunak announced a 20-year blueprint to fortify the medium-term prospects of the UK's semiconductor sector.
Termed the National Semiconductor Initiative, the plan involves an allocation of up to £1 billion of public funds and is perceived by government officials as a crucial element of Britain's forthcoming national security agenda.
In conclusion, Pragmatic Semiconductors' £200 million funding infusion represents a watershed moment for the company and the UK semiconductor sector as a whole. With visionary leadership, ground-breaking technology, and steadfast commitment to its roots, Pragmatic is poised to make a lasting mark on the global semiconductor landscape. This investment not only secures Pragmatic's future but also affirms its status as a trailblazer in the ever-evolving world of semiconductor manufacturing.
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