Networking chip maker Aquantia has raised another $37 million in funding thanks to the continued backing of Cisco Systems and new investors like chip manufacturer Globalfoundries.
Officials with the 10-year-old company announced the new round of funding Oct. 5, noting that Aquantia—which has more than 160 employees—has now raised a total of $199 million from such tech vendors as Cisco, Intel, Xilinx and Globalfoundries. A number of venture capital firms, such as Walden Riverwood and Venture Tech Alliance, also are investing the company.
The fundraising comes at a time when many venture capital groups are deciding not to put money into new semiconductor companies, given the high startup and operation costs associated with the industry.
"The semiconductor industry is experiencing some of the biggest technology inflections in history," Lip-Bu Tan, CEO of Cadence Design Systems and founder and chairman of Walden Riverwood, said in a statement. "Traditional venture capitalists have mostly abandoned investing in emerging semiconductor companies primarily because the sector has become so capital intensive."
Because of that, "private semiconductor companies, with a strong business model, outstanding execution, unparalleled strategic backing and the ability to displace large incumbents, present a unique opportunity for investors," he said.
Cisco has been investing in Aquantia from the outset, not only helping the startup with money but also enabling the company to work with Cisco products for pilot tests and use. As an example, Cisco and Aquantia for several years have worked together to drive the use of 2.5 Gigabit and 5Gb technology in enterprise networks, according to officials with the companies.
"By developing low-power, low-cost, and high-performance integrated circuits, Aquantia has the potential to enable exponentially faster wired and wireless networks for their customers," Rob Salvagno, vice president of corporate development at Cisco and head of Cisco Investments, said in a statement.