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UK Startups and Innovation
14JUN

PhysicsX hits $2.4bn on Temasek cash

3 min read
16:35UTC

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.
Different Perspectives
European VC (Atomico, Plural, Highland Europe as PhysicsX / Lumen adjacents)
European VC (Atomico, Plural, Highland Europe as PhysicsX / Lumen adjacents)
European growth funds have backed three of the week's largest UK rounds via follow-on positions and co-investments; the PhysicsX cap table includes Atomico (European-domiciled, Skype-founded) and Siemens (German industrial), both returning investors who view UK physical-AI as a supply-chain multiplier across Continental manufacturing. European LP capital is filling the growth tier UK state vehicles have not yet reached.
UK regulated-industry coalition (Lloyds, BAE Systems, LSEG via Lumen Sovereign)
UK regulated-industry coalition (Lloyds, BAE Systems, LSEG via Lumen Sovereign)
Thirteen of Britain's most heavily regulated companies backed Cosine not as a philanthropic gesture but to acquire a data-compliant AI tool that replaces costly US API alternatives; each partner provides proprietary data in exchange for early access. Their participation signals that regulated incumbents, not venture funds, may be the structural customer base that sustains the UK's sovereign model tier.
US growth investors (General Catalyst, Intrepid Growth Partners)
US growth investors (General Catalyst, Intrepid Growth Partners)
US and allied growth investors followed Temasek into PhysicsX's Series C; General Catalyst also returned in the round after backing Geordie the previous week. The absence of any US-led domestic-capital equivalent is a structural reading: American funds enter at growth stage where returns are clearest, ceding seed and Series A economics to UK vehicles that are themselves contracting.
Temasek (Singapore sovereign fund)
Temasek (Singapore sovereign fund)
Temasek led PhysicsX's $300m Series C, its second major UK deep-tech cheque in six weeks after co-investing in Isomorphic's Series B with the SAIU; its thesis runs through Southeast Asian advanced-manufacturing adjacencies, not bilateral UK policy. Singapore's sovereign capital is now the default lead for British scale-ups above £200m that fall outside the BBB's priority sectors.
UK Government (DSIT / Liz Kendall)
UK Government (DSIT / Liz Kendall)
DSIT published its first sector scorecard on 10 June setting a £8.3bn 2025 baseline, and the Sovereign AI Unit's compute allocation enabled Cosine's Lumen Sovereign launch. The scorecard's own barbell figure, more capital in fewer rounds, exposes the policy gap DSIT has not yet addressed: no instrument currently leads venture rounds in industrial AI simulation sectors.
Spanish state finance (COFIDES, CDTI)
Spanish state finance (COFIDES, CDTI)
Spain's COFIDES and CDTI have co-invested alongside UK deep-tech rounds in prior cycles and track the British Business Bank's direct-investment activity as a benchmark for state-capital deployment in innovation. BBB's two direct co-investments in one week set a pace reference for Iberian equivalents.