Fractile, a UK-based start-up focused on developing advanced chips for AI applications, has raised $720m in a Series C funding round, resulting in a valuation of $7bn.
The investment round was led by Lightspeed, Founders Fund, Thrive Capital, and Redpoint.
The round saw participation from new and existing backers, including Google’s venture arm CapitalG, DST Global, BlackRock, Elad Gil, SV Angel, Balderton, Britain’s Sovereign AI Venture Fund and the British Business Bank.
Other participants in the funding include Accel, Bain Capital Ventures, Georgian, Shopify Ventures, Kindred Capital VC, T. Rowe Price, Gigascale Capital, Conviction, and Factorial Funds.
The involvement of Sovereign AI and the British Business Bank, both funded by the UK government, is intended to strengthen Britain’s domestic capabilities in AI and critical hardware technologies.
The government has positioned this investment as part of a broader ambition to increase Britain’s global standing in the development of AI and the underlying infrastructure. It aims to translate domestic scientific achievements into UK-based companies, skilled jobs, and industrial resilience.
British Business Bank chief investment officer Leandros Kalisperas said: “Fractile is pushing the frontier of AI forward by rearchitecting the hardware stack. Walter and his team are building chips designed to work faster and at greater capacity, allowing AI to reach new potential, scaling faster and more cost effectively.
“This is British innovation at its best – exceptional technical minds focused on building technology that can compete and win on a global stage. We’re proud to be backing them at this critical stage of growth.”
The company is developing hardware claimed to be faster, more energy efficient, and more cost-effective, covering the full span from chip design to software and machine learning research.
UK AI Minister Kanishka Narayan said: “Fractile represents the very best of British ambition, bringing together world-class chip design, engineering and AI expertise to develop faster, cheaper and more energy-efficient hardware.
“By backing brilliant British companies like Fractile, we’re making sure Britain has the industrial strength and sovereign capability to shape the future of AI, with the jobs and economic rewards coming home to communities across our country.”
This funding arrives shortly after the UK government’s Budget announcement of expanded support for domestic AI and hardware start-ups. The measures include additional funding for Sovereign AI and an increase in investment capacity for the British Business Bank.
The government’s stated aim is to focus on domestic innovation, supporting high-potential British companies and seeking to retain the resulting economic benefits within the UK.
In May 2026, Fractile raised $220m through a Series B funding round to further its work on next-generation inference hardware for AI systems.
