AI chip startup DEEPX lands $80 million Series C at a $529 million valuation

DEEPX is a South Korean on-device AI chip (NPU, or neural processing unit) startup that makes hardware and software for various AI applications in electronic devices. The company announced this week that it has raised $80 million (KRW 108.5 billion) in a Series C round at a valuation of $529 million (KRW 723 billion), which is more than eight times higher than its Series B funding , about $15 million. in 2021.

The Series C funding, which brings the total raised to approximately $95 million, will go towards mass production of the startup’s first products – DX-V1, DX-V3, DX-M1 and DX-H1 – for global distribution in late 2024 . The startup will also use the new capital to accelerate the development and launch of next-generation Large Language Model (LLM) on-device solutions.

DEEPX was founded in 2018 by CEO Lokwon Kim, who previously worked at Apple, Cisco Systems, the IBM Thomas J. Watson Research Center and Broadcom.

The market size of global edge AI, also known as on-device AI, is is expected to reach $107.47 billion by 2029According to a recent report, this is up from $11.98 billion in 2021. “The AI ​​market on devices, excluding edge servers, requires implementing AI capabilities, bypassing servers or the cloud” , Kim told JS. “The [on-device AI market] is expanding through computer vision capabilities such as facial and voice recognition, smart mobility, robotics, the Internet of Things and physical security systems.”

Kim said that if mass production begins this year, potential customers such as finished product manufacturers can commercialize their products with DEEPX’s AI chips in 2025.

DEEPX, with approximately 65 employees, is not the only company that has developed AI chip solutions. The Korean team competes with Hailo, which secured a $120 million funding round last month; SiMa.ai, which also closed at $70 million in April; and Axelera, a Belgium-based AI chip startup that raised $27 million in 2022.

Kim said his company’s distinguishing features include cost efficiency, energy consumption efficiency and All-in-4 AI Total Solution, a comprehensive solution for various AI applications. The all-in-4 AI solutions include: DX-V1 and DX-V3, designed for vision systems in home appliances, surveillance camera systems, robot vision and drones; as well as DX-M1 and DX-H1, which are designed for AI computer boxes, AI servers, smart factories and AI booster chips. DEEPX now has more than 259 patents filed in the U.S., China and South Korea, Kim said.

“Nvidia’s GPGPU-based solutions are the most cost-effective for major language model services such as ChatGPT; The total energy consumption of GPUs has reached a level greater than the electrical energy of an entire country,” said Kim. “This collaborative technology between server-scale AI and large on-device AI models is expected to significantly reduce energy consumption and costs compared to relying solely on data centers.”

The startup has no customers yet, but is working with more than 100 potential customers and strategic partners, such as Hyundai Kia Motors Robotics Lab and Korean IT company POSCO DX, to test DEEPX’s AI chip capabilities.

SkyLake Equity Partners, a South Korea-based technology-focused private equity firm, led the latest investment, with participation from BNW Investments, a Korean private equity firm founded by the former president of Samsung LED and Samsung Electronics’ memory chip unit. AJU IB and former financier Timefolio Asset Management also participated in this round.