Silicon Valley startup SiFive announced Thursday that it has closed a $400 million funding round from Atreides Management, Nvidia and other investors, to enter the booming market for central processors for data centers.
This fundraising brings SiFive’s valuation to $3.65 billion. CEO Patrick Little told Reuters he expected this to be the company’s final funding round before an IPO, although he did not specify a timeline for that plan. SiFive does not commercialize chips, but sells architectures that customers such as Google (Alphabet) can customize for their own in-house chip designs. This intellectual property market was dominated for decades by Arm Holdings, but Arm last month unveiled its own chips, becoming for the first time a potential competitor to many of its historic customers.
According to Little, Arm’s new strategic direction has opened an opportunity for SiFive to attract new customers. SiFive’s architectures use a new open chip standard called RISC-V, overseen by a nonprofit foundation and not controlled by a single company, unlike Arm’s technology.
“There is uncertainty about the ability of their usual suppliers to support them over the next few years,” Little said of SiFive’s customers. “Everyone is now reassured, because we have worked with them for a decade, that RISC-V has reached sufficient maturity to constitute a viable alternative.” SiFive will use the $400 million raised to develop a central processing unit (CPU) architecture for data centers. This market is booming: Arm launched an offer last month, Nvidia is entering the segment and Intel is facing such demand that it is struggling to satisfy it.
“We decided to target the most prestigious segment of data centers,” said Little.
In addition to Atreides and Nvidia, other investors in this round include Apollo, D1 Capital Partners, Point72, as well as accounts advised by T. Rowe Price Investment Management, not to mention historical investors Prosperity 7 Ventures, Capital Group and Sutter Hill Ventures. (Reporting by Stephen Nellis in San Francisco; French version by the editor)
