VCs flock to Chinese chip designer Moore Threads
Moore Threads, a Chinese chip designer established as recently as last October by a team from Nvidia, has closed two funding rounds amounting to several billion renminbi.
The latest tranche - described as a pre-Series A - was led by Sequoia Capital China, GGV Capital, and Shenzhen Capital Group. China Merchants Venture, ByteDance, Pony.ai, Riverhead Capital, Oceanpine Capital, Wenming Investment Fund, First Capital, 5Y Capital, Shenzhen-listed H&T Intelligent also took part.
The exact size of the funding rounds was not disclosed.
Moore Threads specializes in graphics processing unit (GPU) chip design. GPU is a general platform for visual computing and artificial intelligence computing. It is used in autonomous driving, image recognition, big data analysis, and financial transactions.
The company claims to be the only world-class operator in China capable of covering the entire GPU lifecycle, from R&D and design to manufacturing, marketing, and service support. In addition to Nvidia, team members come from technology companies such as Microsoft, Intel Corporation, AMD, and ARM.
“GPU chips, which can satisfy general graphics and high-performance computing, represent the height of chip technology,” said Jixun Foo, a managing partner at GGV Capital, in a statement. “It is very demanding for a team in China to develop GPU chips with world-level performance and to achieve commercial success as well.”
Nvidia’s market share in China has risen from 50% in 2008 to 80% in 2020, according to Gu Lan, a chip expert at Shenzhen Capital. Moore Threads brings together many of the system architects, graphics technology R&D scientists, chip design experts, and marketing practitioners who helped Nvidia succeed in China. "Such a mature and proven local team is very scarce,” Lan said.
Chip design is arguably the most popular area among PE and VC investors targeting China's semiconductor industry, largely because it has the highest technology content and is the least capital intensive. Companies seen as having the potential to challenge global market leaders - by virtue of targeting emerging industry segments or having very strong teams - are hot commodities.
Biren Technology, an artificial intelligence (AI) chip designer, has commanded a similar level of investor attention. The start-up - which was founded in 2019 by a former senior executive at SenseTime and has a technology team drawn from Huawei Technologies - has raised RMB2 billion across Series A and pre-Series B rounds in the past 12 months.
Other chip designers receiving funding in recent months include Enflame Technology, which closed a RMB1.8 billion Series C in January. Meanwhile, last July, VC-backed Cambricon Technology became the first Chinese AI chip manufacturer to list on Shanghai's Star Market.
Winsoul Capital served as the exclusive financial advisor for Moore Thread's recent fundraising.
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