Northern Gritstone Research
Investment Thesis
Northern Gritstone is a groundbreaking life sciences and deep technology venture capital firm rooted in the North of England. Founded in 2022 and active since May 2022, the firm's core thesis is to seize the North of England's world-class university innovation opportunity — investing in science and technology startups that solve global problems and have the potential to scale worldwide. Their philosophy is captured by the phrase 'profit with purpose': they back companies with exceptional teams, breakthrough technology, and business models that can deliver both financial returns and meaningful societal impact.
The firm works in close partnership with the four 'Northern Arc' universities — University of Leeds, University of Manchester, University of Sheffield, and University of Liverpool — which together generate approximately £879 million in annual research funding, 92% of which is rated world-leading or internationally excellent by the Research Excellence Framework. These four universities produce the highest annual volume of university-owned spinouts in the UK. Northern Gritstone also invests in early-stage companies from the wider North of England ecosystem outside the university spinout pipeline.
Sector Focus
Northern Gritstone concentrates its investments across deep technology and life sciences with six primary sub-themes:
- Life Sciences and Biotech: novel therapeutics, gene editing/modulation, gene therapy, bioelectronics for cancer treatment, and industrial biotechnology applications
- Health Tech and MedTech: computational medicine, AI-powered diagnostics, medical devices for neurological disorders, healthcare training simulation, and enzyme discovery platforms
- Semiconductors and Advanced Hardware: flexible integrated circuits, high-performance infrared sensors, near-infrared optical sensors, advanced X-ray detection materials, and immersion cooling for data centres
- Novel Materials and Clean Technology: bioplastics, energy-efficient coatings for power grids, battery anode materials, food molecule engineering, and auxetic materials from liquid crystal elastomers
- Secure Computing and Quantum Technologies: photonic processing for fully homomorphic encryption (FHE), quantum-safe encryption hardware, and passwordless authentication systems
- Robotics, AI and Autonomous Systems: robotics software platforms, insect-brain-inspired autonomous navigation, digital twins, and energy-efficient AI algorithms using logic-based techniques
The firm explicitly avoids sectors without deep IP and technology foundations.
Stage Focus
Northern Gritstone is a patient, long-term investor. They describe themselves as having 'the patience, capital and resources to support companies from their early stages to later growth.' In practice, the portfolio spans from pre-seed through Series A and beyond:
- Pre-Seed: smallest investment seen is £850K (Cavero Quantum, 2024)
- Seed: most common entry point, typically £1.5M–£5M lead or co-lead
- Series A: they have led significant rounds (£23M Series A for Optalysys, January 2026)
- Growth: they follow on into later rounds (£7.5M into Pragmatic Semiconductor's £182M Series D)
They are a permanent capital company rather than a traditional LP fund, which means they are not bound by typical 10-year fund cycles and can hold positions long-term.
Check Size
Initial investment check sizes have ranged from approximately £850K to £7.5M for new positions. When leading rounds, they have written checks ranging from £1.5M up to approximately £10M+. Their largest disclosed single investment is a £23M Series A lead in Optalysys. For follow-on investments in the Pragmatic Semiconductor Series D they invested £7.5M alongside M&G and the National Wealth Fund. Typical initial checks are £1.5M–£5M at seed stage.
Recent Activity
Northern Gritstone has been highly active since 2022 and has made 50 investments as of April 2026. Recent highlights include:
- July 2026: £2.5M investment into Pixel-Flo, a University of Sheffield spinout
- June 2026: £1.5M follow-on into Silveray (digital X-ray materials)
- May 2026: £2.5M into techbio company Imperagen (seed round)
- April 2026: Announced £20M rolling close, bringing permanent capital to £382M (British Business Bank and Andrew Law)
- March 2026: Co-led £2M pre-Seed round in AmpliSi; led £3M Seed round in Cytotrait
- January 2026: Led £23M Series A extension in Optalysys (photonic processing / FHE)
- December 2025: Invested in IVFmicro (University of Leeds spinout, NG Studios graduate)
- October 2025: Invested in Sitehop (quantum-safe network encryption)
- August 2025: Invested in PhovIR (near-infrared optical sensor spinout from University of Manchester)
- April 2025: Raised £50M bringing total permanent capital to £362M (from Northern LGPS, Aviva, Fulcrum Asset Management)
The firm is actively deploying capital and seeking to raise additional funding through a one-year rolling close in 2026.
Portfolio Highlights
The portfolio of 50+ companies spans a wide range of deep tech and life sciences categories. Highlights include:
- Pragmatic Semiconductor: Flexible integrated circuit manufacturer; participated in £182M Series D alongside M&G and the National Wealth Fund; aims to revolutionise low-cost, flexible semiconductor fabrication
- Optalysys: Photonic processing company enabling Fully Homomorphic Encryption (FHE); raised £23M Series A led by Northern Gritstone in January 2026; enables secure computation on encrypted data
- Iceotope: Global leader in precision liquid immersion cooling for data centres; contributing toward net-zero emissions in data infrastructure
- Phagenesis: Medical device company treating neurological dysphagia (swallowing disorders); received £5M investment in March 2024
- Sitehop: Next-generation FPGA-powered, quantum-ready network encryption with sub-microsecond latency; invested October 2025
- Opteran: Re-engineering insect brain patterns to power autonomous machines; novel biomimetic navigation and vision
- Floreon: Advanced bioplastic from renewable crops (corn, sugar cane) as a renewable substitute for oil-based plastics
- SimAnalytica: Digital twin and decision intelligence company with two decades of simulation and data science expertise
- Mimetrik: AI-driven 3D dental scanning using machine learning to generate fully digitised patient dentition and facial structure
- Literal Labs: Newcastle University spinout using logic-based techniques to generate custom energy-efficient AI models; led by ex-Arm executive Noel Hurley
Notable earlier-stage companies include QV Bioelectronics (first-of-its-kind implanted electrotherapy device for brain cancer), Cavero Quantum (quantum-safe passwordless encryption), AmpliSi (silicon anode battery materials), and Pencil Biosciences (gene modulation for therapeutics and industrial biotechnology).
Team
The firm is led by a highly experienced team across investment and innovation support:
- Lord Jim O'Neill, Chairperson: Cross-bench peer in the House of Lords; former Goldman Sachs chief economist (2001–10) and chairman of its asset management division; creator of the BRIC acronym; former Commercial Secretary to the Treasury (2015–16); Chair of Northern Powerhouse Partnership
- Duncan Johnson, CEO: Former Head of Caledonia Private Capital (FTSE 250 listed investment trust) 2011–2021; founding partner at RJD Partners; trained as chartered accountant at PwC
- Simon Braham, CIO: Experienced private equity, growth and impact investor; joined from Bridges Fund Management where he led Sustainable Growth Funds in the North; 15 years prior experience at Bridges and LDC; background at KPMG, JP Morgan Cazenove, and Lloyds Banking Group
- James Hadley, CFO: Fellow of ICAEW; trained at KPMG; 20 years in financial services (Santander, RSA); previously CFO & COO at Savannah VC
- Khadija Ashfaq, Investment Director: Former Northstar Ventures (early-stage AI, life sciences); CFA Investment Management Certificate; BSc Economics, University of York
- Cassie Doherty, Investment Director: Over two decades in university spinout investing; joined from Parkwalk Advisors; PhD in Biochemistry, University of Leeds; specialises in life sciences therapeutics, agtech, and enabling technologies
- James Gibbons, Investment Director: Background building, investing in and advising deeptech spinouts; joined from Old College Capital; previously led IP Licensing at University of Leeds; spent 4 years as MD of a VC-backed university spinout
- Gareth Llewellyn, Investment Director: University of Sheffield alumnus (1st Class MEng Mechanical Engineering); previously at Grosvenor Food & AgTech; operational experience in COO roles in portfolio companies
- Alison Maughan, Investment Manager: Oxford BA in Biological Sciences; previously at Deepbridge Capital with 50+ investee company experience across full deal cycle
- Tom Kaye, Investment Manager: Former Anticus Partners (Finance Yorkshire regional investment funds); CFA Level 4 Certificate; graduate in Accounting and Finance, University of Leicester
- Eve Howarth, Co-Investor and Capital Manager: Former Lazard real estate and venture team; supported Pragmatic's £182M Series D raise; First Class BA Economics, University of Durham
- Andrew Naylor, Head of Origination: Former CEO of Nottingham Technology Ventures Ltd; 17+ years growing technology businesses as investor, advisor, CEO, and NED; PhD in Physics, University of Nottingham
- Alex Macpherson, Independent NED: Venture capitalist with 25+ years experience; co-founder of Octopus Ventures (CEO until 2017); venture partner at Isomer Capital; member of DeepTech Labs Investment Committee
Geographic Focus
Northern Gritstone is headquartered in Manchester with additional offices in London, Leeds, and Sheffield. Their investment focus is primarily the North of England — Greater Manchester, West Yorkshire (Leeds), South Yorkshire (Sheffield), and Merseyside (Liverpool). They also consider the North of England more broadly, including investments from Newcastle (Literal Labs) and other Northern cities. The founding thesis positions the Northern Arc as part of the UK's 'Innovation Cluster Diamond' alongside Cambridge, London, and Oxford.
Decision Process and Governance
Northern Gritstone operates an Investment Committee that is responsible for all normal course investment, divestment and follow-on investment decisions. They also have an Audit Committee, Remuneration Committee, Purpose & Impact Committee, and a separate Valuation Committee. The governance structure is institutional-grade, appropriate for a permanent capital company with local authority pension fund shareholders. Investment decisions are collegial and committee-based, not solo-GP driven.
Unique Attributes: NG Innovation Services
A distinctive differentiator is the NG Innovation Services 'toolkit' for portfolio companies, comprising:
- NG Studios: Accelerator program powered by KQ Labs (quantum technology partner); launched July 2025; IVFmicro was a graduate of the first cohort
- NG Talent: Connects portfolio companies with sector-specific entrepreneurs, operating partners, and C-suite expertise
- NG Growth: Strategic growth advisory for portfolio companies
- NG Co-Investment: Manages relationships with co-investors to support portfolio fundraising
- NG Business Services: Operational support services
Shareholder and Capital Structure
Northern Gritstone is a permanent capital company (not a traditional LP fund), owned by its management team, blue chip institutions, several of the largest local authority pension funds in the North of England (including Greater Manchester Pension Fund, Merseyside Pension Fund, and West Yorkshire Pension Fund via Northern LGPS), Aviva, Fulcrum Asset Management, the British Business Bank (£40M total committed as of April 2026), Andrew Law (CEO of Caxton Associates), and a number of HNWIs. The founding universities each hold a small shareholding. Total permanent capital as of April 2026 is £382 million (~$481M). The firm is seeking to raise further capital through a rolling close in 2026.