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Mythic, an AI chip startup that reportedly raised capital last November, rose from the ashes today with an unexpected fresh round of funding.
Mytics announced this morning that it has closed a $13 million financing round led by existing investors Atreide Management, DCVC and Lux Capital, along with new investors Catapult Ventures and Hermann Hauser Investments. While the tract is a fraction of the startup’s previous revenue ($70 million), Mythics says the tract will allow it to market its “next generation” product — an improved energy-efficient AI processor.
“In today’s challenging economic environment, this new funding will help Mythics focus on its technology offering, go-to-market strategy and customer acquisition,” Mythics’ newly appointed CEO Dave Feek told TechCrunch in an email interview.
Mitics, co-founded by Fick and Mike Henry at the University of Michigan under the name Isocline, developed chip technology that stores analog values on flash transistors. As digital processors “pause” to swap in and out of dedicated memory, Mitics can perform parallel computations without stopping hardware, leading to performance and efficiency gains, especially for AI applications – or at least the company.
Mitic first worked on projects for the US Air Force through the Small Business Innovation Research (SBIR) program, focusing on computer vision for high-altitude drones and GPS signal acquisition. Once the contracts were finalized, the startup decided to pursue the venture capital route, raising more than $170 million from investors including Hewlett Packard Enterprise and BlackRock.
In its first commercial chip, the M1076, Mitiq doubled down on computer vision use cases, building a system that could detect small objects from far away in less than 33 milliseconds. It may be these capabilities that have attracted Mitik’s biggest client to date, Lockheed Martin, whose corporate arm Lockheed Martin Ventures is a major investor in the startup.
So what went wrong? Well, Mythic was competing in a very crowded field. Dozens of startups are — and are — developing chips that put AI on the cutting edge, including SiMa.ai, Axelera, Flex Logix, NeuReality, EnCharge, Hailo, and Kneron. But funding is drying up. According to The Register, global VC equity for semiconductor startups fell 46 percent to $7.8 billion in 2022, reflecting a backlash for capital-intensive companies.
Image Credits: fairy tale
It wasn’t just breasts that were mythologized. AI chipmaker Graphcore, which saw its value cut by $1 billion last year after a deal with Microsoft collapsed, said it was planning job cuts due to an “extremely challenging” macroeconomic environment. Meanwhile, Habana Labs, the Intel-owned AI chip company, has laid off about 10% of its workforce.
Fick — who rose from CTO to Mythic’s CEO after Henry — to return to stability. has been CEO, left to pursue other interests – efficiency is the priority. For example, Mythic now uses more development partners and off-the-shelf components than ever before, reducing costs and (hopefully) reducing time to market.
As Fick prepares to release its next-gen chip, the M2000, Fick asserts that Mitix has the added benefit of making R&D “more efficient.”
“Given the new macroeconomic environment, we expect many startups to take a similar approach, especially for systems companies that want to offer more components beyond their core technology,” but Mitics says the advantage of the analog computing approach is that we can use more mature processing nodes. These have more supply chain availability than bleeding edge nodes and are also much more cost effective.
Beyond cost reductions, Mythics has revamped its go-to-market strategy, returning to its roots with a “renewed focus” on defense (with a modest public safety, industrial and consumer slant), Fick said. I would not explain. But presumably, that means chasing more customers for government contracts like Lockheed.
“Cloud computing is often not available on the battlefield, creating a tight edge computing environment. Advanced computer vision is being applied in many areas, including large and small drones, ground-based autonomous systems, radar, augmented reality headsets, and more.” These technologies can be applied to many applications while the M2000 reduces size, weight, power and cost to deploy high-performance computer vision.”
Critics may dismiss the legendary defensive pillar as a coincidence, but there’s no denying there’s a source of capital out there. According to a recent report by PitchBook, after years of shying away from investments in military and security-related technology startups, VCs are raising their profile in the sector as the US tries to contain threats from adversaries including China and Russia. In the year In 2022, VC-backed US aerospace and defense companies saw $7 billion in investments through October 13, pushing the sector ahead of 2021’s record value of $7.6 billion.
As Matt Oko, managing partner of DCVC, put it in rather apocalyptic terms: “Mythic’s Processor delivers data center GPU performance in the size, power and functionality of long-term edge systems protecting America’s schools and public spaces. Violence and terror, and our nation’s military on the battlefield. Mythics technology bridges the gap between what AI researchers publish and what systems developers do, and offers revolutionary potential for national defense and national security.
Analyzing the buzz, investors are excited about Mythic’s new defensive-forward direction — at least for now. Time will tell if it is the right one.
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