Chip Startup Astera Labs Rockets To Over $3B Valuation After Funding Round

Despite a financial slowdown in the tech sector, some portions of the semiconductor industry are showing signs of resilience, bolstered by AI, IoT and cloud demand.

Astera Labs on Thursday announced a valuation of $3.15 billion after a $150 million funding round led by Fidelity Management & Research and backed by other investors – including Intel’s investment arm.

Santa Clara, Calif.-based Astera also said it has added to its board of directors, bolstered its product portfolio, increased employee count and added two new research and design centers in Canada this year despite a backdrop of a looming recession and global inflationary pressure. The company, which provides data and memory connectivity solutions and was featured in CRN’s 2022 list of hottest semicondictor companies to watch in 2022, is partnered with Intel, TSMC and AWS.

Despite some disappointing earnings announcements from chip companies in recent weeks, Astera Labs’ Series D funding news further signals some bullish activity in the industry, particularly in the data center and cloud segments. AMD reported healthy North American cloud growth in its latest quarterly earnings and the company continues to eat up data center market share. Warren Buffett’s Berkshire Hathaway this week reportedly invested $4 billion in Taiwan chip giant TSMC.

“Astera Labs continues to surpass every milestone for a technology start-up, and we are now deep into the next stage of evolution for our company as we accelerate growth,” Jitendra Mohan, Astera Labs’ chief executive officer, said in a statement. “This latest funding round is a testament that we are not only invested in the right growth markets such as cloud, artificial intelligence/machine learning, and hyperscale infrastructure, but that we are also able to consistently execute and deliver breakthrough connectivity products that are critical to our customers and partners.”

In five years, Astera Labs has developed three products to enable higher bandwidth, increased memory capacity and better connectivity for data centers through Compute Express Link, PCIe, and ethernet technologies. Its latest product line – the Leo Memory Connectivity Platform – leverages new CXL industry standards to enable “mainstreaming” of AI and ML (machine learning) in the cloud, the company said.

In 2022, the company added two new research and design facilities in Vancouver and Toronto, bringing its global footprint to six locations.

The company is also hiring in North America and Asia. Astera Labs currently has 164 employees, according to LinkedIn.

CRN has reached out to Astera Labs for comment.

Kent Tibbils, vice president of marketing for Intel distributor ASI Corp. in Fremont, Calif., said the increased interest in emerging server technology is ultimately a boon for the channel. “We get caught up thinking about AI as something out of a sci-fi movie,” he said. “But there are so many business uses and a lot of companies are discovering what they can do with all this data and how they can run their businesses more efficiently.”

A boost for a data center ecosystem partner like Astera Labs is a good sign, Tibbils said. “It’s always great to see emerging and maturing tech companies that are going to drive the next level of growth. The more these companies innovate and bring new capabilities, it’s a very good thing. The server market is becoming so vertical now, and that’s ultimately better for the channel.”