GL Ventures leads $130m round for China’s Biren
Biren Technology, a Chinese artificial intelligence (AI) chip design company, has raised a RMB900 million ($130 million) pre-Series B round led by GL Ventures, the VC unit of Hillhouse Capital.
Sky9 Capital, Gaorong Capital, Co-Stone Capital, and Shenzhen Haichuang Fund Management also participated, as did Jinpu Investment, a unit of government-backed Shanghai International Group. Existing investors including Green Pine Capital Partners, IDG Capital, V Fund, and state-owned Zhuhai Da Heng Qin Company re-upped.
Biren raised a RMB1.1 billion Series A led by Qiming Venture Partners, IDG Capital and Walden International in June. It was said to be the largest ever Series A in the chip design space and valued the company at $800 million.
Biren was founded in 2019 by Wen Zhang, a former president of AI developer SenseTime. A source close to the company told AVCJ that the technology team is from Huawei’s US research team. The company plans to first focus on high-performance computing chips for use in general-purpose cloud-based processes. Chips dedicated to AI training and graphics rendering will come later.
“Since 2012, the amount of compute used in the largest AI training runs has doubled every three-and-a-half months. These improvements have been a key component in AI progress,” Alex Zhou, a partner at Qiming told AVCJ earlier this year. “AI could allow semiconductor companies to capture 40-50% of total value from the technology stack, compared to 10% in more mature industries. It’s the best opportunity they’ve had in decades.”
Unlike the first silicon boom, which centered on Silicon Valley, the latest wave of AI chip development spans the US, China, Europe, and Israel. As of mid-2019, VC firms had invested more than $2.6 billion across 40 start-ups, with China leading the way. In 2018, investments in AI chip companies in China eclipsed those in the US, according to a report by US-based Ark Investment Management.
Other players in China’s AI chip design space include Enflame Technology, which raised a RMB700 million Series B led by Summitview Capital, and Cambricon Technology, which received investment from CICC Capital, Alibaba Group, and Lenovo, before listing on Shanghai’s Star Market. Cambricon is the first Chinese AI chip manufacturer to complete an IPO.
The Star Market has changed the way domestic investors assess chip companies, with profit no longer a hard requirement. As a result, public market excitement has filtered into private market valuations, creating what many regard as an IC (integrated circuit) bubble.
“Investors who follow traditional investment philosophy should not buy in at sky-high valuations, but they don’t want to miss out,” Lidong Zhao, founder and CEO of Enflame, told AVCJ. “They believe that making a wrong bet is not as bad as missing a huge opportunity.”
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