UK markets close in 1 hour 13 minutes

British Startup Graphcore Hits $2 Billion Valuation

Amy Thomson

(Bloomberg) --

Graphcore Ltd., the British semiconductor firm whose chips are used to run artificial intelligence programs, has raised $150 million, bringing its valuation to $1.95 billion.

The company now has $300 million in cash, which it will use to invest in research and development and global expansion, Bristol, England-based Graphcore said in a statement on Tuesday.

After it raised $200 million in 2018, Graphcore was approached by additional investors who wanted to put money into the company, Chief Executive Officer Nigel Toon said in an interview.

While the company has no immediate plans for an initial public offering, several of its investors, such as Baillie Gifford, have experience investing in publicly traded technology companies and are the types of shareholders the company would try to target if it were to go public at some point in the future, Toon said.

“Having this additional capital on hand allows us to accelerate our investment and allows us to be in a position to support the really large customers who we’re building business with,” Toon said.

Read Businessweek’s profile of Graphcore here.

Programs running artificial intelligence have different requirements from traditional software. Instead of telling machines what to do step-by-step, AI learns from pools of data, making greater demands on a computer’s memory and a processor’s energy use. Chips built to run artificial intelligence programs, therefore, have to prioritize efficiency.

Graphcore’s chips are designed for “less precise” computing, mimicking the way human brains work, and helping artificially intelligent machines draw conclusions more like we do. They also need more processing power.

Late last year, Graphcore announced a deal with Microsoft Corp. to offer its processing units on the U.S. company’s Azure cloud platform, with financial services giant Citadel an early customer.

Graphcore has been adding engineers, expanding its operations in Asia and the U.S., and ramping up its customer service force and software development arm. The firm is also building out a team in Oslo that’s creating large-scale systems connecting thousands of its processors that can take on increasingly complex problems, like those raised by natural-language processing, which is important for the digital assistants proliferating on home speakers and smartphones, and self-driving cars.

The current round includes Baillie Gifford, Mayfair Equity Partners, and M&G Investments. The firm, founded in 2016, has also previously gotten investment from Microsoft, BMW and Samsung Electronics Co.

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.