Chip startup Calxeda attracts equivalent to £34m in funding

Semiconductor startup Calxeda on Tuesday announced that it raised $55 million (£34 million) in its latest funding round, with Austin Ventures and Vulcan Capital joining the ranks of investors in the company's ultra-low power ARM-based chip solutions for servers capable of running on as little as 5 Watts.

Other investors in Calxeda, which was founded in 2008 and currently has approximately 100 employees, include ARM Holdings, Advanced Technology Investment Company, Battery Ventures, Flybridge Capital Partners, and Highland Capital Partners.

"This significant infusion of capital will accelerate the exciting trajectory we've been on for the past four years. Businesses require a more efficient solution for the Web, cloud, and big data. That is what Calxeda is now delivering and this funding will enable us to go bigger and faster," Barry Evans, Calxeda co-founder and CEO, said in a statement.

You may be wondering why the Texas-based company has attracted such interest from big money investors. Calxeda has in fact been touting recent performance tests conducted in-house and by third parties which the company claims demonstrates that its server chips "deliver as much as a ten-fold improvement in energy efficiency compared to today's commodity x86-based servers."

Patrick Moorhead, principal analyst at Moor Insights & Strategy, said the large funding round "must mean field trials at the largest data centres are going well."

"What Calxeda has done, that others aren't doing in the category, is placing a focus on the entire rack, not just the chip itself. Calxeda's secret sauce is the fabric, integrated management functions in the SoC, and the management software that ties it all together. You could place about any chip into the architecture and it would do well," Moorhead said.

If that sounds familiar, the blending of low-power processors and a hyper-efficient data centre fabric is something so-called "micro-server" makers like SeaMicro, a company acquired by Advanced Micro Devices earlier this year, have been pushing for a few years as an alternative to relatively power-hungry back-end systems running on Intel's Xeon chips and AMD's own Opteron parts.

Calxeda's new partners sounded enthusiastic about the its prospects in a data-driven world.

"I am very impressed with the innovative approach and completeness of Calxeda's vision. Calxeda thinks like a solution company, aligning their technology to solve the bigger challenges. They aren't just chip guys," said Vulcan Capital managing director Steve Hall.

That sentiment was echoed by Clark Jernigan of Austin Ventures, who noted that as "the market has begun to embrace disruptively power-efficient datacentre architectures," Calxeda has "demonstrated solid customer traction across several key end user segments."