Eliyan raises $145M Series C at $1B valuation to solve AI chip data bottlenecks

By: Stephen Nellis Source: Reuters

SAN FRANCISCO, July 29 (Reuters) – Eliyan, a startup focused on alleviating data transfer bottlenecks between AI chips in data centers, announced on Wednesday that it has raised $145 million in venture funding at a $1 billion valuation.

The Santa Clara, California-based company said the funding round included backing from Cisco Systems, Lumentum, and an early investor in networking pioneer Mellanox prior to its acquisition by Nvidia.

Addressing a Core Industry Challenge

Eliyan is developing technology for the growing number of companies creating custom AI computing chips to compete with graphics processing units (GPUs) from Nvidia and Advanced Micro Devices.

Regardless of the manufacturer, most AI chips today face a fundamental limitation: they can process data far faster than they can send or receive it, leaving expensive chips idle while waiting for data.

"People have tried to build faster compute, faster processors and GPUs," said Eliyan CEO and co-founder Ramin Farjadrad in an interview. "Today we are at the point that we are maybe 30-40% of the GPUs is being used, and is being mainly limited by how fast they can receive the data to process. We're solving that problem."

Market Context and Strategy

Nvidia addressed the connectivity issue by acquiring Mellanox for $6.8 billion in 2019. Companies such as Alphabet's Google and Amazon.com's cloud unit work with firms like Broadcom and Marvell Technology to access networking technology.

Eliyan aims to provide an independent alternative by both licensing its technology and supplying "chiplets"—components that companies developing custom processors can integrate into their own designs.

Financial Outlook and Funding Details

Patrick Soheili, Eliyan's chief strategy and business officer, said the company expects to begin initial chiplet shipments this year. He forecasts hundreds of millions of dollars in sales by the end of 2027, up from "low millions" in revenue in 2025.

The Series C funding round was led by Seligman Ventures, with participation from existing and new investors in addition to Cisco and Lumentum. As part of the deal, Seligman Managing Partner Umesh Padval—who served on Mellanox's board at the time of its sale to Nvidia—will join Eliyan's board.

(Reporting by Stephen Nellis in San Francisco; Editing by Jamie Freed)