Scottish National Investment Bank hit by PureLiFi collapse

Yes — the Scottish National Investment Bank is absorbing a roughly £15 million hit after PureLiFi collapsed into administration, with all 42 Leith staff made redundant. The light-based wireless firm ran out of cash before profitability, and SNIB had already provisioned for the failure in its latest accounts amid wider portfolio losses.

Key Takeaways

• pureLiFi Limited entered administration on 31 August 2026 after failing to raise further capital, with all 42 employees at its Leith headquarters made redundant.
• The Scottish National Investment Bank’s total commitment was £15m, of which £14.7m had been drawn down; a July 2022 fundraising had provided £10m of SNIB firepower for scaling.
• Administrators say a costly shift into manufacturing its own hardware, rather than licensing patented LiFi technology, left the firm short of cash by the end of Q2 2026.
• SNIB says risk is built into its development-bank mandate and that anticipated losses were already flagged in its annual report as unrealised losses.
• Since 2012 the company is understood to have raised more than £35m from investors, funds and banks, yet never crossed into profitability.

For readers tracking public capital, private tech bets and portfolio risk, this episode sits squarely in the wider conversation around wealth hacks and passive income — not because LiFi was a retail income product, but because taxpayer-backed investment choices shape what grows, what fails and who pays when ambition outruns cash flow.

What happened to PureLiFi and why does it matter?

Edinburgh-based PureLiFi, founded 14 years ago as a University of Edinburgh spin-out by “father of LiFi” Professor Harald Haas and Dr Mostafa Afgani, has collapsed. Joint administrators Kenny Craig and Kevin Mapstone of BTG were appointed by the directors on 31 August 2026 after the firm failed to raise further development capital.

The company employed 42 staff at its head office in Leith. According to BTG managing partner Thomas McKay, the business “simply ran out of money before it could cross into profitability.” By the end of the second quarter of 2026 it had run out of cash flow and was seeking extra investment to cover losses until it could turn profitable. With none forthcoming, directors appointed administrators to stop debts rising — and all 42 employees were made redundant immediately.

That matters beyond one balance sheet. LiFi — wireless data sent via light-emitting diodes, infrared and higher reaches of the electromagnetic spectrum — was pitched as a highly secure complement to wi-fi, 4G and 5G. PureLiFi had attracted interest from the US army, a US maritime company and Nasdaq-listed Astronics Corporation. In April it sealed what was described as a “landmark” partnership with network equipment maker Askey aimed at fixed wireless access indoors without drilling or cabling. Ambition was high; runway was not.

How deeply was the Scottish National Investment Bank exposed?

The Scottish National Investment Bank told The Herald that its total commitment to pureLiFi is £15m and that £14.7m of that has been drawn down. Daily Business Magazine reports SNIB moved quickly after administrators were appointed to note Pure LiFi among recent write-offs, accounting for about £15 million of a growing total.

A July 2022 fundraising had provided £10m from SNIB, allowing the business to begin its next scaling phase. Across its life since 2012, PureLiFi is understood to have raised more than £35 million from a range of investors, funds and banks — more than a dozen sources, administrators said.

SNIB emphasised it had “made a provision for the potential failure of the company in its recent annual report and accounts as part of its unrealised losses,” meaning losses anticipated at the end of administration had already been reported. Separately, the bank last month reported a net loss of £138 million for the year to March, reflecting £65m of realised losses from the failure of three early investments and £85m of unrealised losses, including writedowns and anticipated losses on further portfolio companies whose administration processes were not complete by 31 March.

A SNIB spokesperson said the bank had worked with pureLiFi and other stakeholders to review options, but “market challenges proved too great.” As Scotland’s development bank, it was set up to fill a funding gap, take higher risk than commercial investors, and accept that “some failures are inevitable,” with strategy judged on the whole portfolio over the long term.

Why did investors walk away from light-based wireless?

McKay pointed to a strategic shift into manufacturing hardware based on PureLiFi’s own LiFi technology and intellectual property, rather than licensing globally patented tech to third-party manufacturers. That move, he said, “was more costly than initially anticipated.” The firm had created products and generated revenue, but cash ran out first.

Daily Business editor Terry Murden notes that concerns about the technology’s limits were raised years earlier — including when SNIB made one of its first multi-million-pound commitments. Marketing director Stephanie Howey, then at US telecoms firm Talkroute, argued in 2022 that LiFi did not improve latency for video calls, gaming or VoIP, required line-of-sight like a TV remote, and could not pass through walls — so every room would need transmitters, making consumer roll-out costly. She said LiFi had niche uses, including easing spectrum pressure, but “touting it as a wi-fi replacement makes no sense at all.”

A full public explanation of why fresh investors stood back is still incomplete. Murden flags higher-than-expected manufacturing costs as a factor, and a market that has grown more selective about what to back. LiFi, in that climate, “just dropped down the list of priorities.”

What happens next for staff, creditors and the IP?

BTG says it is helping affected staff access entitlements and support, including Partnership Action for Continuing Employment (PACE) and the Redundancy Payments Service. Administrators’ priority is also to identify assets and realise maximum value from their sale — especially intellectual property built over years of development — for the benefit of creditors.

Whether that IP finds a buyer, and whether any of PureLiFi’s partnerships or patents survive in another corporate form, remains to be seen. What is already clear is the human cost in Leith, the size of the Scottish National Investment Bank exposure, and the reminder that breakthrough wireless stories still live or die on cash runway, unit economics and investor appetite — not on the glow of the technology alone.

For anyone weighing public investment narratives against private returns, the PureLiFi collapse is a case study in how “next big thing” wireless bets can still leave unpaid loans, portfolio write-offs and redundant teams when manufacturing costs and market caution arrive before profitability.