Microchip Technology, a nearly $50 billion tech giant, has recently acquired the Neuronix AI startup in response to the growing demand for advanced AI technologies. This marks the second exit in Tensor Ventures‘ portfolio, showcasing the success of deep tech even in turbulent times.
The development of artificial intelligence goes hand in hand with the demand for computing power capable of processing massive amounts of data. While NVidia dominates this market, competitors are rapidly emerging. Microchip Technology with a market value of $47.8 billion and revenues of USD 8.4 billion, strengthens its position in this arena with the recent acquisition of Neuronix AI.
The sale of the startup, founded in 2020 by Yaron Raz and Asher Hazanchuk, was significantly influenced by its largest investor, deep tech fund Tensor Ventures. This marks the fund’s second recent exit to a global company. Besides Tensor Ventures and Depo Ventures, Neuronix AI attracted investments from Frontures and Alchemist Accelerator. The transaction was facilitated by Harvest Management Partners.
“Advancements in hardware alone are currently insufficient to keep pace with developments in artificial intelligence technologies, creating both disparities and pressure to create solutions capable of processing data faster and with lower energy consumption,” explains co-founder and CEO of Neuronix AI, Yaron Raz. Thanks to its expertise in machine learning, computer vision, video compression and software optimization, Neuronix AI significantly reduces energy consumption and costs in areas such as semiconductors, security technologies, smart cities, mobility, retail, and other industrial sectors.
Neuronix AI has demonstrated its potential not only by being recognized by CIO Review as one of the top twenty promising technology solutions for the semiconductor industry but also by its ability to attract capital. After going through The Alchemist Accelerator, the startup attracted investments from Tensor Ventures, Depo Ventures, and Frontures.
“When Yaron approached me as a mentor during the Alchemist Accelerator in 2021, I knew we had to invest. Despite initial scepticism from some funds, we managed to have Tensor Ventures join us at Depo Ventures. This collaboration played a crucial role in the success of Yaron and his team. With hindsight, it’s evident that investing in advanced technologies made sense,” says Michal Ciffra from Depo Ventures.
“The sale of our stake in Neuronix is quite extraordinary given its context in a fiercely competitive market in Israel. The success of this transaction is also closely related to Tensor Ventures direct involvement in the M&A process and our extensive experience in the semiconductor industry, particularly from Intel,” says Petr Ulvr, one of the co-founders of Tensor Ventures, who oversaw the transaction for the fund.
Tensor Ventures held the largest share in Neuronix AI among the funds, marking its second completed exit in a relatively short time. In December, it sold its stake in the startup UltimateSuite, which provides task mining solutions, to the American company ServiceNow.
