The company disclosed today that its A and B rounds were completed last year. Investors included Walden Riverwood Ventures and Capricorn Investment Group (which both led Series A), Greylock Partners (which led Series B), Qualcomm, and S-Cubed Capital.
Innovium had mentioned the $15 million A round on its website, omitting the investments of Qualcomm and S-Cubed. Series B, which apparently exceeded $35 million, is being publicly disclosed for the first time.
Innovium hasn’t announced its products yet, but the company does ‘fess up to being a semiconductor startup targeting the networking space. It seems likely Innovium is developing an Ethernet switching chip to compete with Broadcom’s Trident and/or Tomahawk franchises.
The startup’s founders believe Ethernet needs a new approach when it comes to the data center. Virtualization has created a hornet’s nest of traffic between servers — so-called east-west traffic — that switches weren’t previously designed to handle. The expected growth in the Internet of Things (IoT) will only exacerbate the problem.
“What IoT adds to the picture is the fact that the number of devices increases dramatically,” says Rajiv Khemani, Innovium CEO. “Secondarily, all of these devices require a tremendous amount of back-end analytics — that’s an increased amount of compute and data in the data center.”
Chip startups have been rare in Silicon Valley, because it takes years to realize a high-end semiconductor design. Innovium’s funding mostly has to do with betting on the founding team.
“In general, the venture community is hesitant investing in silicon startups because of the cost of bringing something to market,” Khemani says. “What they’re interested in is big problems and highly competent teams of people willing to take a fresh, deep-dive kind of approach.”
The lawsuit stemmed from the fact that two of Innovium’s founders came from Broadcom, the dominant vendor in Ethernet switch chips. Broadcom filed suit in January 2015, a little more than a month after Innovium incorporated, accusing the founders of breach of contract and appropriation of trade secrets.
The suit was settled shortly after Broadcom got acquired by Avago.
In white-box switching, Broadcom has enjoyed a near-monopoly with its Trident family — the chips have even found their way into systems designed by big companies like Cisco. Competition is starting to ramp up, though. In addition to Innovium, Cavium has put up a challenge with its XPliant product line.