Why We Invested In - Ayar Labs

We are in a time of exciting change at Downing Ventures as we hone our areas of expertise, with a key area of focus being the future of computing. We are strengthening our knowledge and understanding of trends in the market, alongside building our team and network in the sector to help identify the best opportunities globally. We are constantly looking at the market, speaking to entrepreneurs and industry experts in our network to identify the challenges of today and where valuable solutions can be built.

One clear market force has been increased demands on computer processing, driven by both the rise of High-Performance Computing (HPC) and data intensive AI workloads. Whilst many companies, both small and large, are focusing on creating new and more powerful chipsets to process this data, there are several other related sub-sectors that we believe are being overlooked by many companies and investors, where we are finding compelling investment opportunities.

We believe interconnects is one of these sub-sectors that is changing the future of HPC and is a key enabler of the computer processing market. The Ayar Labs solution of Optical I/O, provides a unique opportunity for co-packaged optics and a breakthrough in silicon photonics. Our analysis suggests this presents a multi-billion-dollar opportunity within a relatively limited competitive landscape, due to the material innovation of the Ayar Labs’ product.

Interconnects play an integral piece of the technology stack in the future of computing. Key challenges focus around three major components: bandwidth, latency and energy requirements.

Whilst Ayar Labs primary focus is within HPC, we believe this technology will become widespread within data centres across all major data intense sectors - in today’s world, this applies to most industries. We believe Ayar Labs can address many of the challenges of improving performance while also reducing energy consumption and associated costs. Ayar Labs has created a novel optical I/O that enables in-packaged optics. This has been cited by many as the “holy grail” of silicon photonics.

The Ayar Labs product has the ability to drive 1000x improvement in interconnect bandwidth density at up to 10x lower power requirements. We believe this combination of reduced power and high bandwidth can and will revolutionise the industry. The product has passed key milestones, notably a live demonstration with Intel earlier in the year, highlighting the advancement of their technology and superior performance relative to many competitors. Ayar Labs’ patented approach uses industry standard cost-effective silicon processing techniques to develop high speed, high density, low power optical based interconnect “chiplets” and lasers to replace traditional electrical based I/O, that are integrated into traditional semiconductor packages. Essentially, they are moving data using light.

Downing Ventures invest in world-class management teams as much as they do in the global market opportunity. Ayar Labs have a truly amazing team with deeply technical founders out of MIT, combined with the strength of industry veterans with significant commercial expertise. This provides the magical balance of technical and commercial experience, which is a rare combination in a start-up environment.  

We are proud to be working in an investment syndicate of other leading players in the market – including Intel, Global Foundries, Playground Global, Founder’s Fund, Lockheed Martin and Blue Sky Labs -  whose insight and partnership we respect and value hugely, as we collectively work closely as partners to help Ayar Labs grow.   

All the Downing Ventures team are excited to be in the pages of the next chapter in the Ayar Labs story. A key part of this fundraise is to help the team grow internationally into the UK and Europe – this is our home territory where we have a fantastic community of experts to help them reach global heights. The only way is up!