A couple of weeks ago, I was running around a grey and drizzly Bristol meeting startup folk in the area. Despite the weather, there was a buzz in the air.
That morning, the FT had released a report about Europe’s leading startup hubs. SETsquared, a startup incubator run by six universities in the south west and south east of the UK, including Bristol, came in third — which practically everyone I met mentioned. Since launching in 2002, its alumni have gone on to raise £4.4bn, according to the incubator.
What caught my attention, though, was the lineage of semiconductor startups sparked by the incubator.
Truth be told, Bristol’s semiconductor credentials can be traced back to the 1970s, when US chip company Fairchild Semiconductor made the city its UK home. A little later, another silicon chip developer, Inmos, launched in Bristol and went on to raise millions in UK government funding.
A generation on, the chip flywheel started to turn further courtesy of SETsquared alum XMOS, which designs semiconductors and has raised $113m since spinning out from the University of Bristol in 2005.
Inside the startup, a division that was developing processors specialised for AI spun out as its own entity in 2016. That was the birth of Graphcore, led by CEO Nigel Toon and CTO Simon Knowles — who left the same roles at XMOS.
Graphcore grew into one of the UK’s most promising tech darlings, but hit choppy waters last year as it struggled to generate serious revenue with its tech. It made layoffs in 2022 and is reportedly on the hunt for an acquirer. That’s brought an opportunity for others.
“While layoffs may not be good for that particular company — it can be good for the area in terms of disseminating new information and ideas,” says Jonathan Ferguson, VP of silicon engineering at Dutch semiconductor startup Axelera — which is building hardware and software for AI applications.
Axelera opened an office in Bristol in June 2023 and hired five employees — including Ferguson — from Graphcore the previous winter. While those hires weren’t laid off — the bulk of Graphcore’s staff cuts happened in its Norway and China offices — looming uncertainty at a company can make employees start looking elsewhere for work, Ferguson says.
“Graphcore pulled a lot of people into the area, and now they’re staying,” he adds.
Another semiconductor company, VyperCore, which is developing chips for data centres, has also tapped Graphcore employees. The startup opened an office in Bristol in July last year and hired a quarter of its 16-strong team there from the UK chip company.
“Bristol is the epicentre of leading-edge high-performance processor design in Europe,” says founder and CEO Russell Haggar. “That's why Graphcore started in Bristol, and that's why other companies are setting up design teams there. The city has a 40+ year pedigree in this space.”
The Bristol semiconductor sector is indicative of a thriving deeptech ecosystem in the UK’s south west. Solid university connections to develop innovative tech, support programmes to help commercialise it and an ecosystem of founders, as well as experienced tech workers, provide much-needed experience for new startups.
It’s proving a potent combination. Last year, a report by the Royal Academy of Engineering Enterprise Hub and data platform Beauhurst found that outside of the fabled ‘Golden Triangle’ (London, Oxford and Cambridge) places like Bristol and Manchester were emerging as attractive spinout hubs. And it got me curious about other towns and cities around the UK that are building happening startup sectors away from the gilded lights of the Golden Triangle.
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