The Silicon Valley startup SiFive announced on Thursday that it has closed a $400 million funding round with Atreides Management, Nvidia, and other investors to enter the rapidly expanding market for data center core processors.
This fundraising round values SiFive at $3.65 billion. CEO Patrick Little told Reuters that he expects this to be the company’s final funding round before going public, although he did not specify a timeline for this project. SiFive does not sell chips but offers architectures that customers like Google (Alphabet) can customize for their own internal chip designs. For decades, this intellectual property market has been dominated by Arm Holdings, but Arm unveiled its own chips last month, becoming a potential competitor for many of its historical customers.
According to Mr. Little, Arm’s new strategic direction has created an opportunity for SiFive to attract new customers. SiFive’s architectures use a new open chip standard called RISC-V, overseen by a non-profit 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 in the coming years,” Mr. Little said about SiFive’s customers. “Everyone is now reassured, as we have been working with them for a decade, that RISC-V has reached sufficient maturity to be 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 offering last month, Nvidia is entering the segment, and Intel is struggling to meet demand.
“We have decided to target the most prestigious segment of data centers,” Mr. Little stated.
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, and historical investors Prosperity 7 Ventures, Capital Group, and Sutter Hill Ventures.
(Reporting by Stephen Nellis in San Francisco; Editing by the editorial staff)
