Chip Startup Astera Labs Raises $50 Million at $950 Million Valuation

  • The semiconductor startup Astera Labs announced Monday that it raised a $50 million Series C round.
  • Astera Labs works with partners like Intel, Amazon Web Services, and Taiwan Semiconductor.
  • Astera Labs, valued at $950 million, reached a near-unicorn status within three years.

The semiconductor startup Astera Labs has nearly reached unicorn status within three years – a pace that’s rare in the industry, especially for young hardware-based companies.

Astera Labs announced Monday that it raised $50 million in a Series C round led by Fidelity Management and Research that values the company at $950 million. With the funding, it plans to ramp up production and double its team. It has about 65 employees now, but wants to grow that to 120 to 130. All told, Astera has raised $85 million in venture capital funding.

The startup is on track to surpass $100 million in revenue by next year, says Sanjay Gajendra, who serves as both chief operating officer and chief business officer. That momentum, plus the new funding, puts Astera Labs in a good position if it chooses to hold an IPO in the not-so-distant future, Gajendra said.

Its ultimate goal is to become the “go-to company” for connecting server and cloud applications, Gajendra said. Astera Labs now partners with companies like Intel, Amazon Web Services, and Taiwan Semiconductor to develop technology together.

“Because we already demonstrated that our technology works, and we meet the quality expectation for all the server folks, cloud folks, now what’s happened is everyone is coming to us,” Gajendra told Insider.

Founded in 2018, much of the Astera Labs team previously worked at semiconductor giant Texas Instruments. Gajendra, CEO and chief technology officer Jitendra Mohan, and the rest of the team realized there that modern interconnects weren’t very well-suited to the rising growth of running artificial intelligence systems from cloud platforms.

Many cloud and data center operators use multiple processors running in parallel just to power the advanced algorithms that underpin modern software.

The founders saw an opportunity to rethink how processors and servers are built, Gajendra said, with a focus on making sure they maintain a high level of power efficiency, connectivity, and the ability to detect and correct whenever performance slows down. Ultimately, they decided a startup was the best way to do it, encouraged by being around the successful tech entrepreneurs in the San Francisco Bay Area.

“Being in the Silicon Valley, it’s crazy,” Gajendra said. “Everywhere you go, you see folks that are talking about startups and doing something new.”

Sanjay Gajendra Astera Labs

Astera Labs chief business officer and COO Sanjay Gajendra

Astera Labs

Astera Labs is much smaller than competitors like Microchip, which also designs products for use in complex computer systems. But Gajendra said that this has in many cases proven to be an advantage. 

“Being a small company, a nimble company with the right experts in the industry working on a single goal, you have the advantage of moving much faster and much more efficiently,” Gajendra said. He also said: “Even though we are small, with 65 people, we have still been able to be extremely efficient in managing our cash as well as supporting the growth that we have.”

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