SiFive, a chip design startup based in California, has raised considerable funds to take on heavyweights in the industry, mainly Arm Ltd, the British chip design giant. The startup recently raised $175mn in fresh funding at a $2.5bn valuation. Coatue Management, a blue-chip tech-focused investment firm, led the round.

• SiFive designs computing chips based on the open-source RISC-V architecture and license its designs to hardware producers. The company was founded by the inventors of RISC-V at the University of California, Berkeley, in 2015.

RISC stands for Reduced Instruction Set Computer, a type of computer processor using a small, highly optimized set of instructions. RISC-V is one of the families of computer chip architectures based on the Reduced Instruction Set Computer (RISC).

Advanced RISC Machine (ARM) is another prevalent chip architecture based on RISC. Unlike RISC-V, ARM is a proprietary architecture, and the company that owns it is Arm Ltd, a UK-based company. ARM is the most widely used RISC-based architecture. Here’s a dazzling statistic; over 200 billion ARM-based chips have been shipped since its inception in 1985.

SiFive wants computer chips based on the open-source RISC-V architecture to become a formidable force in the industry and eat into the market share of ARM-based chips. The startup makes money from licensing its RISC-V-based chip designs to hardware producers, just as Arm Ltd does from licensing ARM-based designs.

• SiFive’s $175mn Series F funding round gives it fuel to charge on its contest with ARM Ltd. The startup also recently secured another chunk of capital by selling OpenFive, its processor-agnostic chip design business, for $210mn to Alphawave (LON: AWE), a Canadian semiconductor IP company.

• Selling OpenFive means SiFive is now primarily focused on RISC-V chip design. The $210mn of sale proceeds plus $175mn of new capital is sufficient to fund research & development in the meantime in its race against Arm Ltd.

• RISC-V is growing rapidly, so SiFive’s focus on the space makes strategic sense. RISC-V hardware partners grew 130% in 2021 to around 2,500. Intel (NASDAQ: INTC), the chipmaking giant, became a partner this February.

A group of well-known investors also participated in SiFive’s $175mn round alongside Coatue Management. They include Qualcomm Ventures, AMD (via Xilinx Ventures), Samsung Ventures, Intel Capital, Western Digital Capital, and SK Hynix. These names should ring a bell, as they’re all globally leading chipmakers making strategic investments.

SiFive has raised around $350mn from VCs, including the latest funding round. It’s a company to keep a close eye on going forward.

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