Intel Capital leads investment in Israeli AI-processor startup Habana Labs

$75 million series B funding round is raised by the Tel Aviv-based company; Intel’s VC arm has invested in three other Israeli startups in past month

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

Wendell Brooks, the senior vice president of Intel Corp. and president of Intel Capital, speaking at the Intel Capital Global Summit, May 8, 2018 (Courtesy)
Wendell Brooks, the senior vice president of Intel Corp. and president of Intel Capital, speaking at the Intel Capital Global Summit, May 8, 2018 (Courtesy)

Intel Capital, the investment arm of US technology giant Intel Corp., has invested in Israeli startup Habana Labs, a maker of artificial intelligence-based processors and chips.

The investment was made as part of a $75 million series B funding round for the startup led by Intel Capital. Other investors in the round were WRV Capital, Bessemer Venture Partners, Battery Ventures and existing investors. Since its founding in 2016 Habana Labs has raised a total of $120 million, the Israeli startup said in a statement. The funds will help the firm grow its activities.

Habana Labs uses artificial intelligence to improve the processing performance of chips and lower their costs and power consumption. The processors are aimed at the specific needs of training deep neural networks.

The company designs the chips and outsources their manufacturing. It has offices in Tel Aviv and San Jose, California, and employs 120 people worldwide, according to its website.

“We are humbled by the trust deposited in us by such a dream team of investors, including the world’s leading semiconductor company, Intel,” said David Dahan, chief executive officer of Habana Labs. The funding will be used to continue the development of its chips and training solutions, including the firm’s next generation 7nm AI processors, to increase its sales and customer support teams.

An illustrative image of a computer processor on a board (Denis83; iStock by Getty Images)

The startup’s first processor, Goya, is already being sold to customers worldwide, and the firm is planning to release a training processor solution for testing in the second quarter of 2019, the statement said.

The Goya processor has already set two industry records — for efficiency, by delivering 15,088 images/second throughput, and power efficiency, with 151 images/second/watt, offering a performance that is one to three times better than solutions commonly used in data centers today, the statement said.

Habana’s team has a “proven track record in the industry,” said Wendell Brooks, senior vice president of Intel Corporation and president of Intel Capital. “Habana Labs’ innovation and execution on their vision will help drive the next evolution of Artificial Intelligence.”

Artificial intelligence is paving the way for “a significant wave of new semiconductor companies, and venture firms are heavily investing in AI-focused chip startups,” said Lip-Bu Tan, founding partner of WRV Capital, an international venture firm focusing on semiconductors and related hardware, systems, and software. “Among all AI semiconductor startups, Habana Labs is the first, and still the only one, which introduced a production-ready AI processor.”

Intel Capital invests in startups targeting artificial intelligence, autonomous vehicles, datacenter and cloud, 5G, next-generation computing and a wide range of other technologies. Since 1991, Intel Capital has invested $12.3 billion in 1,544 companies worldwide, and more than 660 portfolio companies have gone public or participated in a merger.

In October, Intel Capital invested in a $30 million series A funding round raised by Netanya-based StarkWare, a maker of blockchain technologies. This month the US firm invested in a $12 million series A funding round raised by Tel Aviv-based SAM Seamless Network, a maker of a home Internet of Things network security system, and in gaming technology firm Overwolf, which raised $16 million in a series B funding round.

Intel Capital, which makes both strategic and financial investments in startups for Intel Corp., started investing in Israel in 1997 and had invested more than $375 million in some 80 Israeli startups as of the first half of 2018.

The investments include Alcide, a developer of data center security; Anobit, a developer of flash memory controllers, which was sold to Apple in 2012; OrCam, a developer of wearable vision system to help visually challenged people; and Moovit. Intel Capital made six investments in Israel in 2017.

In May, Yair Shoham, who is part of a team of three in charge of investments for Intel’s venture capital arm in Israel, told The Times of Israel that Intel would be stepping up its investments locally, and they would be “significant in size.”

The investments in high-risk, early stage startups in Israel is Intel’s strategy to be at the “forefront of innovation,” he said.

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