Etched hits $21B valuation with $700M Series D led by Jane Street
What's the deal? Etched, a chip startup founded by three Harvard dropouts, has raised $700 million in a Series D round led by Wall Street trading firm Jane StreetDealroom has a profile for this one. Try Dealroom →. The deal values the company at $21 billion. Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Tiger Global, Bain Capital Ventures, Neo, and Blackstone also joined.
Why so notable? The round ranks among the very largest Series D deals for a US semiconductor startup — in the top 1% by amount across 272 comparable rounds.
What's the endgame? Etched makes server racks filled with AI processors optimised for fast inference — the computing that lets AI models respond to user queries. The startup has booked more than $1 billion in orders and started shipping chips.
The customer: Jane Street, the secretive quantitative-trading giant now leading the round, is Etched's first customer. The $21 billion valuation tops the $20 billion Nvidia paid in December to license technology and hire the leadership of rival startup Groq.
Why the speed matters? Etched says it took 44 days after receiving test chips from Taiwan Semiconductor ManufacturingDealroom has a profile for this one. Try Dealroom → to run inference workloads, versus the six months or more that is typical. "We may be the only AI chip that was built by a startup that was successful on the first try," said co-founder and president Robert WachenDealroom has a profile for this one. Try Dealroom →.
The talent pull: Around 15% of Etched's roughly 400 employees previously worked at Nvidia, and the company is recruiting aggressively from the market leader. Jimmy Daley, a former vice president of data-center systems engineering at Nvidia until he retired in July, is now an investor.
What could go wrong? Chips carry high capital costs and long development cycles, which has kept the sector wary of young founders. "Don't back the kids in chips," was the prevailing wisdom, said Sonya HuangDealroom has a profile for this one. Try Dealroom → of Sequoia, which led Etched's earlier $300 million Series C round. "In chips, startups are guilty until proven innocent."
The signal: Etched's raise shows investors are willing to bet big on hardware challengers to Nvidia — and that a signed customer plus a working chip can override the industry's long-standing caution toward first-time founders.
Read more: The Wall Street Journal
Image credit: Etched
