Following last week’s look at AI, healthcare, and fintech deals across the North in 2025, we now turn to a snapshot of deeptech and university spinouts, where Northern research-led businesses are making a real impact.
Northern Gritstone, the investment company dedicated to backing ambitious science and technology businesses across the North of England, says it completed 24 investments in 2025 from pre-seed up to Series B.
Roughly half of those were made through its venture-building programme, NG Studios. And those growing companies are based right across the North, from Leeds, Liverpool, Manchester and Sheffield.
READ MORE: AI, healthcare and fintech: A snapshot of 2025 Northern tech deals and what’s next
“The Northern Arc is home to some of the world’s top research-led universities, with more than 16,000 researchers generating $1 billion in research funding annually. Across our portfolio, we see this world-leading research manifesting as groundbreaking commercial technology in deeptech and life sciences, and we were pleased to make multiple investments into spinouts from our NG Studios cohorts,” says Simon Braham, Head of Portfolio at Northern Gritstone.
Looking ahead, Marion Bernard, Chief Investment Officer at Northern Gritstone, says the spotlight in 2026 will continue to be on companies developing computing infrastructure and chips to power “ever-growing” AI models.
“We’ve seen this already with companies in our portfolio, such as Optalysys and its photonics technology, and Literal Labs, which uses fast, efficient, explainable, logic-based AI models to accelerate AI performance. Not only that, but I anticipate that companies that support the efficacy of running huge data centres, such as cooling devices, will become increasingly high on the investment agenda.”
So, here’s a snapshot of five of those publicly announced Northern deeptech and spinout deals in 2025 to watch through this year.
Optalysys
This Leeds-based start-up recently raised a bumper £23m series A round, led by Northern Gritstone. Hailed as a ‘defining moment in the evolution of computing’, Optalysys is developing photonic computing technology that processes data using light rather than electricity, promising lower costs and improved data security.
“We strongly believe that photonics will be the source of the next generation of processing, due to the lower cost and improvements in data security, and Optalysys is at the forefront of this evolution,” says Simon Braham.
The fresh funding will ‘accelerate’ commercialisation of the technology.
IVFmicro
With an ambition to make IVF more successful and accessible, this University of Leeds spinout received £3.5m investment in pre-seed funding, led by Northern Gritstone with support from Innovate UK Investor Partnerships Programme.
Co-founded in 2018 by Dr Virginia Pensabene and Professor Helen Picton, the duo built a microfluidic device designed to improve embryo quality and quantity by at least 15%.
Last year, IVFmicro joined NG Studios, which supports pre-seed life science businesses, and is delivered by accelerator KQ Labs, The Francis Crick Institute and Northern Gritstone.
Sitehop
Cybersecurity remains high on the agenda following a wave of high-profile cyber attacks last year. And Sheffield-based Sitehop is hoping to tackle future attacks by building encryption technologies designed to future-proof against quantum computing threats.
Founded in 2022 by Melissa Chambers and Ben Harper, Sitehop raised £7.5m in seed funding led by Northern Gritstone, bringing the company’s total investment to £13.5m. Its products are now live in seven countries, with plans to scale rapidly across commercial and defence markets. Read our interview with the duo here.
PhovIR
University of Manchester spinout PhovIR raised £4m in Seed funding in an oversubscribed round led by Northern Gritstone and deeptech specialist SCVC last year. The company’s Near Infra-Red (NIR) optical sensors can detect the “optical fingerprint” of solids, liquids, and gases in a portable device.
This technology could have multiple uses, from detecting drink spiking and other contaminants to enhancing industrial safety, monitoring pollution and supporting agricultural practices.
The funding will help PhovIR launch its first commercial product, expand its team, and continue its mission to make the “invisible visible”.
Phlux Technology
This University of Sheffield spinout is pioneering semiconductors and raised £9m in Series A funding round last year, led by BGF with participation from existing investors Octopus Ventures, Northern Gritstone and Foresight.
Phlux develops ‘high-performance’ infrared sensors designed to revolutionise connectivity, safety, and mobility. The investment is being used to accelerate Phlux’s expansion into optical communications, using antimonide-based semiconductors to deliver faster, energy-efficient sensor and connectivity systems.
