Chinese artificial intelligence (AI) chipmaker Enflame Technology announced it secured ¥700 million ($98.65 million) in its latest Series B round. Summitview Capital led the firm’s latest cash infusion, which also included contributions from Redpoint China Ventures and Tencent. To date, the Sino startup has raised ¥1.3 billion ($183.7 million) in outside capital and has plans to use its new funding to expand its operations significantly.
Enflame’s Rapid Ascent
Founded in March 2018, Enflame designs and develops hardware and software solutions that optimize cloud-based AI through inference training. So far, the company has impressed with the quality of its products and the efficiency of its workflow.
The firm’s initial offering, the CloudBlazer T10, utilizes 32 scalable intelligent processors and eight system-in-package chips to perform fast, energy-efficient data processing at a rate of 20 TFLOPS. Moor Insights & Strategy founder Patrick Moorhead said the firm’s deep learning solution is remarkable because it proves “you don’t need bleeding edge and expensive processes to tackle power-hungry workloads.”
The company’s debut product is also notable for being released only 21 months after the firm officially launched.
Enflame’s status as a homegrown chipmaker with the ability to innovate has greatly benefited its fundraising capability. In mid-2018, the company conducted a Series A round that netted it ¥340 million ($40 million), and it brought in an additional ¥300 million ($42 million) the following year. The firm’s latest capital injection reaffirms it has the confidence of local investors and gives it the resources necessary for a major evolution.
Mass Production and Tencent Connection
According to Deal Street Asia, Enflame intends to utilize its Series B proceeds to develop a second-generation of AI accelerators, expand its tech support coverage, and enter mass production.
CEO Zhao Lidong said he views his firm’s ability to achieve financial viability as its next priority. “An enterprise will have the vitality for sustainable development only after it realizes profitability with the application and commercialization of its products.” Given recent less than ideal outcomes associated with the growth over income startup mindset, the chipmaker’s strategy seems sagacious.
In addition, Enflame has reportedly conducted “in-depth” discussions about doing business with Tencent.
The Chinese conglomerate has had a relationship with the startup since its founding, contributing to each of its fundraising rounds. The corporation’s interest makes sense as it generates billions of dollars from online games like “Call of Duty: Mobile.” If it can acquire technology to make its data centers run more efficiently, the firm’s investments will be justified.
Also, Tencent operates a cloud services segment that is currently pursuing an aggressive international expansion.
If Enflame becomes a major supplier for Tencent, the startup will likely reach or exceed its revenue targets. Moreover, it will position itself as a significant player within the Chinese smart server market, which IDC predicts will reach $4.32 billion in value by 2023.