Ayar Labs: The Company Optimizing Data Transmission

Ayar Labs is creating better computer performance by replacing traditional copper wires with optical interconnects

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3 min

Moore’s Law suggests that the processing power of computers will double every two years.

While this has proven to be accurate with processor speeds, there haven’t been similar advancements in how quickly data can move in and out of the processor, a critical function for computer-intensive industries.

Ayar Labs, an Alumni Ventures Group portfolio company, is solving this problem by enabling the next phase of Moore’s Law through optical input/output (I/O) technology. The company is replacing traditional copper wires, which are limited by the laws of physics in how fast they can move data, with optical interconnects to break through those semiconductor limitations.

Light Waves Ahead

Ayar Lab’s products are based on ten years of collaboration between researchers at MIT, UC Berkeley, and CU Boulder. The company focuses on optical interconnects — a system that uses light waves to carry signals from one part of an integrated circuit to another — rather than conventional wiring to improve the performance, power, and distance of data.

Through chip-to-chip communications that move data in the form of light using fiber optics, Ayar can increase bandwidth 1000x and reduce energy consumption by nearly 95%.

The company has received revenue from early customers and is deploying prototypes to continue field trials with potential customers. Their traction includes initial milestone contracts signed, including a Master Purchasing Agreement with Intel and a firm order for up to 5,000 units in 2021. To date, the largest and most successful milestone contract is with DARPA for the development of military technology.

What We Liked About the Deal

Strong Market Potential: Ayar is targeting multiple verticals like aerospace, government, AI, high-performance computing, data center interconnects, cloud, and telecommunications. The company predicts that most interconnect technology for data centers will be optical within the next 5-7 years, priming them to capture a multi-billion-dollar opportunity.

Experienced CEO: Charles Wuischpard is an industry expert and has prior entrepreneurial experience as the CEO of Penguin Computing, which was bought by SMART Global Holdings for $60M. He also was a VP at Intel and brings key network connections at Intel, which has been integral in building early traction with them.

Significant Exit Potential: The team and investors believe Ayar is most likely to be acquired in the near term. Given that Intel is a major investor and customer who sidelined its own optical I/O program to invest in and integrate Ayar, they are one potential future acquirer.

Leveraging Strong Alumni Connections 

Alumni Ventures Group accessed a deal with AyarLabs through Castor Ventures, a fund for MIT alumni and friends. Castor has followed the company since 2015 as Castor Partner Cainon Coates went to MIT Sloan with one of the co-founders, Alex Wright Gladstein.

Castor Ventures deployed capital in the company’s $35 million Series B co-led by Downing Ventures, Blue Sky Capital, Intel Capital, Playground, Founders Fund, Rising Tide, Applied Materials, Lockheed Martin, SG Innovate, TechuVentures, and GlobalFoundries.

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Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.