Solarflare Communications has raised $32 million in venture capital to finance the growth of its high-speed networking chip business.
The company’s 10GBASE-T PHY chips make it possible to transfer data within data centers at 10-gigabits per second over the Ethernet protocol, allowing for faster performance and better energy efficiency. Most data networking infrastructure operates at just 1 gigabit per second today.
Backers include Oak Investment Partners, Acacia Capital, Anthem Venture Partners, and others. On top of the venture round, the company expects to close on $12 million in venture debt financing related to the equity round. With the new round and debt, the company has raised $158 million in financing to date.
That’s a pretty staggering amount, but it’s consistent with some of the chip startups that have raised money this year. It’s not unusual for companies in chips to raise $100 million or more. Sometimes, as was the case with Montalvo Systems, even that kind of money isn’t enough.
The company previously raised $26 million in June. Solarflare was started in 2001 as a chip design firm focused on 10-gigabit Ethernet networking. In 2006, it merged with Level 5 Networks in Cambridge, England. It launched its first-generation chips in Feb. 2007.
The company hopes to dominate 10-gigabit networking the way that Broadcom and Marvell have dominated 1-gigabit networking. But those companies are big rivals. Another start-up rival is Aquantia, which raised $25 million in March.
The U.S. Environmental Protection Agency (EPA) reports that national energy consumption by servers and data centers could nearly double by 2011 to more than 100 billion kilowatt hours, representing a $7.4 billion annual electricity cost. With Solarflare’s chips, it’s easier to shift data to outlying equipment with lower-energy costs.
The company has 120 employees.