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The move to adapt cell phone chips for low-power servers suffered a setback today as Calxeda, the startup that was a leading player in the market for servers based on ARM chips, has suddenly ceased most of its operations.
The company decided to wind down after it was unsuccessful in raising additional funding. Calxeda had previously raised $103 million from venture capitalists, including a $48 million round in 2010 and an additional $55 million in October 2012.
“The refinancing fell through quite suddenly, and there wasn’t enough cash to buy us time to find and close additional investors,” said Karl Freund, the VP of Marketing for Calxeda. “We are pretty much shutting down. We will continue to support some customer projects in the hope that the company emerges from this in a smaller but meaningful form.”
Calxeda was an early mover in the effort to adopt cell phone chips for use in servers. The company’s processors are based on technology from ARM Holdings, which has long been used in the iPhone and iPad. But Calxeda had a longer roadmap to production than competing mobile-to-data-center initiatives using Intel Atom chips, and has only recently seen Calxeda-powered servers from Boston Limited enter production, with its technology remaining in the test-and-dev phase with other server OEMs.
Calxeda recently announced its second-generation product line, the EnergyCore ECX-2000 family, targeting the private cloud market. It was also working on a 64-bit system-on-chip, a key step towards making Calxeda competitive in the hyperscale server market. But just 14 months after raising $55 million, it apparently had not made enough progress to continue the effort.
“Carrying the load of industry pioneer has exceeded our ability to continue to operate as we had envisioned,” said Freund. “During this process, we remain committed to our customer’s success with ECX-2000 projects that are now underway.”
“Over the last few years, Calxeda has been a driving force in the industry for low power server processors and fabric-based computing,” Freund added. “The concept of a fabric of ARM-based servers challenging the industry giants was not on anyone’s radar screen when we started this journey. Now it is a foregone conclusion that the industry will be transformed forever. Calxeda is proud of what we have accomplished, the partners who have collaborated with us, the investors who supported us, and the visionary customers who have encouraged us and inspired us along the way.”
Investors included ARM, Austin Ventures, Vulcan Capital, Battery Ventures, Advanced Technology Investment Company (ATIC), Highland Capital, Texas Instruments and Flybridge Capital Partners.