Hailo Raises $120M To Move Generative AI Beyond The Cloud

Source: PitchBook, Jacob Robbins
Photo: Courtesy of Hailo

Israeli startup Hailo has extended its Series C with $120 million to develop specialized chips for running generative AI tasks locally on so-called edge devices rather than sending information to a data center.

Delek Motors, Delek CEO Gil Agmon, businessman Alfred Akirov, VC firm OurCrowd, the Zisapel family and others led the extension. The raise brings the round’s total to $256 million and Hailo’s total capital raised to about $344 million. The raise brings Hailo’s valuation to $1.2 billion, up from $965 million as of 2021, according to PitchBook data.

Much of the VC investment surrounding generative AI has been directed at startups serving data centers that process the intensive workloads of large language models. Lambda, a GPU computing startup, raised a $320 million Series C in February, while Foundry raised $80 million in March for machine-learning-specific cloud platforms.

But some tasks require immediate, low-latency processing. Enter edge devices: Lauded for being energy efficient, more secure and reliable, they handle applications at the source, not outsourcing requests to a data center, by processing data and running large language models like Meta’s Llama 2 locally. Cars utilize edge devices for self-driving functionality, processing and translating data quickly when on the road. Investors hope startups like Hailo can bring generative AI to cars, industrial spaces and other sectors like medicine while lowering costs.

“As GenAI on the edge becomes immersive, the focus turns to handling large LLMs in the smallest possible power envelope,” said Hailo CEO and co-founder Orr Danon in a statement. “AI has to become fully immersive and always available.”

Startups like Hailo—those creating application-specific chips—have weathered the VC downturn relatively well. According to PitchBook data, there was a slight bump in 2023 funding and deal value relative to 2022, with $1.9 billion generated across 34 deals.

With all the excitement surrounding generative AI, Danon said the Series C extension was easier to raise.

“In our previous fundraise, AI was an exciting but somewhat futuristic concept,” he told PitchBook News. “Today, we realize we don’t have to explain the concepts of AI anymore.”

Notable deals in the space include South Korean AI chipmaker Rebellions, which closed a $124 million Series B in January. D-Matrix, a data center-specific chipmaker, raised a $110 million Series B in September.

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https://pitchbook.com/news/articles/hailo-series-c-generative-artificial-intelligence