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UK Startups and Innovation
21SEP

PhysicsX hits $2.4bn on Temasek cash

3 min read
16:52UTC

PhysicsX closed a $300m Series C at a $2.4bn valuation, the week's largest private round, led by Singapore's sovereign fund with no UK state vehicle on the cap table.

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Key takeaway

Singapore's Temasek led the week's largest UK round; no British state vehicle made the cap table.

PhysicsX, a London company founded in 2019 by former Formula 1 engineer Robin Tuluie and Jacomo Corbo, closed a $300m Series C on 8 June at a $2.4bn valuation, more than double its prior round 1. Singapore's sovereign fund Temasek led; M&G Investments and Intrepid Growth Partners came in new, with Atomico, Nvidia, Siemens, Applied Materials and General Catalyst following on.

PhysicsX builds AI that replaces the engineering simulations carmakers, aircraft makers and chip designers normally run over hours or days, collapsing them to seconds. It was the week's largest private round, and no UK state vehicle appears on the cap table. That absence has become the pattern. Orbital Industries pulled $50m a fortnight ago with no British lead either .

Britain's biggest rounds are now underwritten by Singapore, Silicon Valley and allied national-security funds, not by the £6.6bn the British Business Bank has to spend. The state development bank sits a tier below where the marquee rounds actually close, so the upside on the country's largest scale-ups accrues to foreign cap tables. A founder reading the cap table learns where the cheque that clears a nine-figure round actually comes from, and it is not Sheffield or London.

Deep Analysis

In plain English

Engineering simulations, running a car engine design through millions of virtual crash and heat tests, used to take a supercomputer hours. PhysicsX has built software that uses AI to do the same thing in seconds, which means engineers can test ten times more designs in the same day. Carmakers, aircraft builders and chip manufacturers all benefit. On 8 June, the company raised $300m, putting its total value at $2.4bn. The biggest cheque came from Temasek, Singapore's state investment fund. No UK government fund took part. Singapore's money is backing a British company because its AI tools connect directly to Asian manufacturing supply chains where Temasek already has investments. The UK's new British Business Bank mandate could theoretically have invested, but AI simulation for manufacturing is not in its priority sectors.

Deep Analysis
Root Causes

Three factors explain why Singapore's Temasek rather than any UK state vehicle led this round.

Temasek's investment thesis for PhysicsX sits in its advanced manufacturing vertical, where it holds positions in semiconductor capital equipment and automotive supply chains across Southeast Asia. PhysicsX's existing Siemens and Applied Materials customer relationships plug directly into that portfolio as a cross-sell tool, a strategic logic no UK sovereign fund had yet developed.

The British Business Bank's expanded mandate from April 2026 specifically authorised it to lead venture rounds up to £60m, but only in eight designated priority sectors. The eight sectors run from life sciences and clean energy to quantum and defence, and AI simulation for industrial applications falls outside every one of them. That sector exclusion left PhysicsX's round structurally outside what the BBB could lead.

The UK's Patient Capital Review of 2017, published by HM Treasury, identified the structural failure: UK institutional investors (insurance and pension funds) allocate under 1% of assets to venture capital versus 5-10% for US and Singaporean sovereign funds. M&G's entry as a new investor suggests the retail-and-pensions asset manager is finally moving toward the Patient Capital Review's recommendation, but M&G came in at a minority position, not as a lead.

What could happen next?
  • Risk

    Continued absence of UK state capital from deep-tech Series C rounds above £200m means equity upside from the most capital-intensive British innovations accrues offshore.

  • Opportunity

    M&G's new investor entry signals that a UK institutional investor is piloting direct venture positions; if the PhysicsX bet returns, it could catalyse broader insurance and pension fund movement toward UK deep-tech.

Sources:Bloomberg
Mentions:Temasek →Atomico →Nvidia →Siemens →Orbital Industries →British Business Bank →Gartner →London →Dealroom →Palantir →Science →Singapore →PhysicsX →Canada Pension Plan Investment Board →Jacomo Corbo →Intrepid Growth Partners →General Catalyst →Robin Tuluie →Applied Materials →
First Reported In

Update #8 · London startup raises Britain's own AI model

Bloomberg· 14 Jun 2026
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Causes and effects
Caused by
Orbital's $50m raise has no UK lead
PhysicsX's no-UK-lead cap table continues the pattern set by Orbital Industries, which pulled $50m a fortnight earlier with no British lead investor.
Occurred 28 May 2026
Read story →
This Event
PhysicsX hits $2.4bn on Temasek cash
Britain's biggest scale-up rounds keep closing without a domestic lead investor, so the upside on its largest companies accrues to foreign cap tables while UK state capital sits a tier below.
Led to
CuspAI raising $400m on Bezos money
PhysicsX's $300m Temasek-led round established the pattern of US/Asian capital leading the UK's largest AI deeptech rounds, which CuspAI's reported raise continues.
Occurred 20 Jun 2026
Read story →
AI takes record 44% of UK equity market
PhysicsX's $300m Series C exemplified the AI-concentration barbell the BBB tracker now confirms nationally.
Occurred 1 Jul 2026
Read story →
Dealroom projects $34.2bn for UK tech
PhysicsX's Temasek-led round shows foreign growth capital entering UK deeptech without an industrial-buyer mechanism, the contrast Dealroom's aggregate obscures.
Occurred 23 Jul 2026
Read story →
Pension cash goes into PhysicsX round
British Growth Partnership joined PhysicsX's existing Temasek-led capital structure four months after its $300m Series C.
Occurred 30 Jul 2026
Read story →
Different Perspectives
Nscale and Open Cosmos
Nscale and Open Cosmos
Nscale chose the New York Stock Exchange for its listing on 18 September, putting Britain's largest AI infrastructure bet to American public investors rather than British ones. Open Cosmos took the opposite route four days earlier, raising nine figures from an all-domestic syndicate on five years of profit, evidence that staying is possible when the balance sheet allows it.
Dame Chi Onwurah and the Science, Innovation and Technology Committee
Dame Chi Onwurah and the Science, Innovation and Technology Committee
Committee chair Dame Chi Onwurah wrote to government on 7 September asking how Matt Clifford's conflict at ARIA arose and what safeguards protect its governance, and expects a detailed response. Her question has not yet been put to the Sovereign AI Unit, whose own chair sits at a venture capital firm while overseeing state AI equity.
The Entrepreneurs Network
The Entrepreneurs Network
The Entrepreneurs Network's founder survey found 65% say Britain is easy to start a business in but only 14% say it is easy to scale one, with 82% negative on tax and 74% finding investment hard to access. On this reading the constraint is regulation and tax, not the capital-vehicle design the state keeps adjusting.
New Economics Foundation
New Economics Foundation
The New Economics Foundation argues fiscal accounting rules, not political will, cap what Britain's state capital vehicles can do. Matching the KfW and Bpifrance benchmark of 1% of GDP would need the National Wealth Fund to deploy roughly GBP21bn a year by 2028-29, about four times its current capacity.
Competition and Markets Authority
Competition and Markets Authority
The CMA's 8 September report on public procurement asked whether Britain's roughly GBP400bn state-spending system is built to grow high-potential firms rather than simply widen SME participation. Its Recommendation 5 calls for a dedicated frontier-technology procurement framework, an official acknowledgement that today's design may serve the wrong target.
Highland Europe
Highland Europe
Highland Europe, the growth-equity firm behind a €1bn-plus fund, took €65m from the British Business Bank into its Technology Growth Fund VI on 30 July via British Patient Capital. For a Geneva-based growth investor, the Bank's cheque is routine cornerstone capital, unrelated to which Whitehall department currently claims to sponsor UKRI.