Optical chip maker ColorChip raises $25m for growth

26 Nov 2015

Developer of “SystemOnGlass” transceivers, receives funding lead by IGP. Vintage, Gemini Israel Funds, and BRM Group also investing.

ColorChip, which produces dense, “hyper-scale”optical transceivers and advanced optical splitters, has raised a further $25 million in growth-funding to scale up manufacture of its products for communications and data centres.

The company says that with Internet services becoming more data intensive due to streaming HD video, cloud computing and IoT devices, there is a growing need for new technologies to help data-centers manage all of the exponentially growing traffic: “ColorChip’s innovative optical communication solutions are well positioned to help solve the growing bandwidth demand of the web.”

The funding round was led by Israel Growth Partners, a technology-focused growth equity fund with participation from Vintage Investment Partners, and existing investors Gemini Israeli Ventures and BRM Group. IGP General Partner Haim Shani will be joining the ColorChip Board of Directors. To date, the company has raised $60 million with Gemini and BRM leading the previous rounds.

Yigal Ezra, ColorChip CEO, said “The company is currently in high-growth mode, with production expected to increase 15 times in the next 24 months. We are already serving top-tier customers in the US and China, and this new funding will support our efforts to scale further and meet the accelerating demands of the market.”

Semiconductor techniques

ColorChip has developed its SystemOnGlass technology, a hybrid optical integrated circuit. ColorChip uses glass wafers to industrialize its optical devices, allowing for cost effective, rapid, and highly scalable production.

This approach allows the company to bring efficiencies commonly only seen in semiconductor fabrication to the world of optical communications. The company is also vertically integrated and manufactures its core technology in its wholly owned fab in Israel, which utilizes the company’s unique IP and is a critical component of its core technology.

Haim Shani, Co-Founder and General Partner at IGP, said,”We believe that ColorChip’s unique inter-disciplinary optical and networking technology addresses a major pain in an industry that is experiencing exploding bandwidth and speed demands and is looking for breakthrough innovations. IGP believes that ColorChip’s technology provides a unique opportunity to better serve the growing demands of the Datacom market and this round will enable the company to scale its operations to meet those demands.”