Northern Powerhouse Fund Backs World-First CHERI Chip Development
A Sheffield-based semiconductor startup has raised £2.5 million to commercialise what it claims will be the world's first "memory-safe" computer chip, marking a significant milestone in the UK's ambitions to lead the global cybersecurity hardware revolution.
SCI Semiconductor, founded three years ago by industry veterans Haydn Povey and Krishna Anne, secured funding from NPIF II—Mercia Equity Finance and angel investors from the UK and Silicon Valley. The investment represents a vote of confidence in Cambridge University's pioneering CHERI (Capability Hardware Enhanced RISC Instructions) technology, which the UK and US governments have backed as a game-changing approach to cybersecurity.
The Memory Safety Crisis
The timing couldn't be more critical. Memory safety vulnerabilities account for roughly 70% of all cyberattacks, prompting urgent calls for hardware-level solutions rather than continued reliance on software patches and workarounds.
"Memory safe chips have been shown to prevent 70% of all attacks and would enable organisations to continue using existing software", claimed CEO Haydn Povey, whose track record includes founding Secure Thingz, which he sold to IAR Systems for £30 million in 2018.
The CHERI technology moves away from traditional memory address pointers, instead requiring every address to be accompanied by metadata that includes permissions and security boundaries. This hardware-enforced approach promises to stop buffer overflows, memory corruption attacks, and other exploitation techniques that form the backbone of modern cyber warfare.
Silicon Valley Meets Sheffield Steel
SCI's approach stands out in a crowded cybersecurity market by tackling the problem at the silicon level rather than through software solutions. The company's Iceni family of chips will be the first commercial products based on Microsoft's open-source CHERIoT-Ibex processor core, which is built on Cambridge's decade-long research programme.
The blue-chip customer validation makes this particularly compelling from an investment perspective. Google Research has already signed up as a customer, providing crucial early-stage market validation for the technology.
The funding will enable SCI to establish its Sheffield headquarters and recruit 20 engineers, doubling its current team of 20. This expansion comes from over £1 million in UK government technology development grants the company has already secured, demonstrating the public sector's commitment to nurturing this critical technology.
The Northern Powerhouse Play
The Northern Powerhouse Investment Fund II investment reflects the government's broader strategy to establish the North of England as a deep-tech powerhouse. With its £660 million war chest, NPIF II provides loans from £25,000 to £2 million and equity investments up to £5 million specifically to support SMEs across northern England.
"By backing pioneering businesses like SCI, we're helping to build a stronger, more resilient regional economy and positioning the UK as a global leader in deep tech," noted Lizzy Upton, Senior Investment Manager at the British Business Bank, which oversees the fund.
Market Opportunity and Challenges
The market opportunity is substantial. With regulations like the EU Product Liability Directive making manufacturers increasingly liable for security vulnerabilities in their products, hardware-level security solutions become desirable and potentially mandatory.
SCI's technology promises to address this by enabling existing C code to run securely with minimal performance overhead—reportedly just 1-3%—without requiring complete software rewrites. This could prove crucial for adoption in cost-sensitive embedded applications across the automotive, industrial IoT, and critical infrastructure sectors.
However, the path to commercialisation faces significant challenges. The semiconductor industry is notoriously capital-intensive, with long development cycles and complex manufacturing partnerships. SCI must navigate relationships with foundries, particularly as it targets a 22nm manufacturing process for its first commercial chips, expected in the second half of 2025.
The Competitive Landscape
SCI enters a market where traditional cybersecurity approaches have largely failed to stem the tide of memory-related vulnerabilities. The company's hardware-first approach differentiates it from software-focused security vendors, but it also means competing against established semiconductor giants with deeper pockets and existing customer relationships.
The key advantage lies in the open-source ecosystem building around CHERI technology. As a founding member of the CHERI Alliance, SCI benefits from collaborative development while maintaining commercial differentiation through its specific chip implementations and customer relationships.
Investment Outlook
From a financial perspective, SCI represents the type of deep-tech investment UK policymakers desperately want to see flourishing. Combining world-class university research, government backing, experienced management with proven exit credentials, and early customer validation creates a compelling investment thesis.
Povey's previous exit experience adds credibility, while co-founder Krishna Anne's Silicon Valley connections provide crucial US market access. The involvement of academic luminaries like Dr David Chisnall from Cambridge and Professor John Goodacre from Manchester underscores the venture's technical credibility.
The £2.5 million funding should provide a sufficient runway to achieve key commercial milestones, particularly launching the first Iceni chips later this year. Success in this initial commercialisation phase would likely attract significantly larger Series A funding from major technology investors.
The Broader Implications
SCI's progress has implications beyond a single startup success story. The UK's Digital Security by Design programme, which has supported CHERI development, represents a rare example of long-term government investment in fundamental research yielding commercial dividends.
Success here could establish a template for similar deep-tech commercialisation efforts, particularly in areas where the UK maintains research leadership but has historically struggled to capture commercial value.
For the cybersecurity industry, more broadly, hardware-enforced memory safety represents a paradigm shift from the current model of endless software patches and incident response. If SCI can demonstrate commercial viability, it may accelerate broader industry adoption of security-by-design principles.
Conclusion
SCI Semiconductor's £2.5 million funding round represents more than another startup raising capital. It signals the potential commercialisation of a fundamentally different approach to cybersecurity, backed by rigorous academic research and early customer validation.
Combining Sheffield's emerging tech ecosystem, proven management, and revolutionary technology creates the ingredients for significant commercial success. However, execution remains everything in the capital-intensive semiconductor industry.
As cyber threats continue to evolve and regulatory pressure mounts, SCI's memory-safe chips could represent the future of secure computing. This funding round offers UK technology investors a rare opportunity to back genuine innovation with global market potential firmly rooted in British research excellence.
The real test now lies in successful commercialisation and market adoption. Should SCI succeed, it won't just validate the Northern Powerhouse investment strategy – it could establish the UK as the global leader in next-generation cybersecurity hardware.
27/05/25 09:58