Written by Itay Inbar - Senior Associate
At Greenfield, we are always on the lookout for investment opportunities that align with our thematic views in segments of the market we believe to be overlooked by others. As such, we couldn't miss the opportunity to shape the next generation of datacenters and enter an imminent, exploding market alongside an extraordinary team led by Chairman Avigdor Willenz and CEO Ronnen Lovinger. That’s why we are proud to announce that Greenfield Partners is leading a $33m financing round in silicon photonics leader DustPhotonics.
Data is growing at a rapid pace, driving a massive increase in datacenter scale and necessitating ever-increasing data transfer rates to move data quickly and efficiently. This in-turn is skyrocketing growth in optical interconnect speeds, expected to double every 2-3 years in the foreseeable future.
Current state-of-the-art 400G optical interconnect speeds within the datacenter are pushing up against the physical limitations of current generation technologies, and speeds are expected to reach 800G, 1.6TB, and beyond in the near future. Given the complexity required to achieve these speeds, optics in the datacenter have become a huge cost element, accounting for ~50-80% of a datacenter’s interconnect Bill of Materials (BOM) – more than the switches themselves. These costs are due to numerous factors, including labor intensive production processes, numerous discrete components, significant electricity consumption, and expensive lasers and materials.
DustPhotonics is a pioneer in the emerging field of Silicon Photonics, a field set to revolutionize optical interconnect in the datacenter and beyond. Leveraging materials and production processes from the Semi conductor industry, Silicon Photonics achieves order of magnitude improvements in cost of production, manufacturing speed, reliability, and energy consumption; as well as paving the way for the future of datacenter interconnect - co-packaged switches and optics. In short, Silicon Photonics is likely the only solution for datacenter speeds expected to arrive 3-5 years from now (800G+) while offering significant cost and opex advantages for speeds currently in the market (100G/400G). These innovations are creating a rapidly growing multi-billion dollar market, increasing at over 46% per annum according to industry analysts and forecasted to hit~$4bn by 2025.
Silicon Photonics holds many advantages over current technologies but given complexities in the physical properties of silicon, its development has been a difficult scientific/engineering problem to crack and has not been efficiently achieved until recently. DustPhotonics has been able to make a significant scientific breakthrough within this field in what some have called “the holy grail of photonics". With extensive expertise in design, development and production of transceivers and business relationships with industry leaders, we are confident in the team’s ability to bring their innovation quickly and successfully to the broad market.
At Greenfield, we invest in phenomenal teams as much as we do in large market opportunities. Led by the talented Ronnen Lovinger, DustPhotonics’ experienced team has multi-disciplinary expertise in Silicon Photonics, optical, mechanical, and electrical engineering, as well as in successfully bringing optical products to market. The team has demonstrated this deep expertise to date with exceptional execution, and we are thrilled to partner with them to build upon this foundation.
We are proud to partner with a world-class investor syndicate led by Chairman Avigdor Willenz, who has served for decades on the forefront of Israel’s technology and semiconductor industries, leading notable companies such as Habana, Annapurna, Galileo, and many others from inception to multi-billion dollar valuations. We are also thrilled to work with long-time friends and visionary investors Zvika Limon, Lip-Bu Tan, founder of Cadence Systems, and Noam Kaiser at Intel Capital.
The entire Greenfield team is excited to join our new partners and take part in DustPhotonics’ journey as they shape the next-generation data center, enabling the world’s data infrastructure to scale to unprecedented levels and meet the demands of the future.