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AI Chip Startup Mythic Raised $13M

Introduction

AI chip startup Mythic has made headlines again, this time with an unexpected injection of fresh funds. The company closed a $13 million financing round that will enable it to bring its “next-generation” product, an improved energy-efficient AI processor, to market. Mythic was competing in a crowded field of startups developing chips to run AI efficiently at the edge, but funding for the capital-intensive firms has been drying up recently. To claw back to stability, Mythic’s newly appointed CEO Dave Fick prioritized efficiency, leveraging more development partners and off-the-shelf components, and revised the company’s go-to-market strategy with a renewed focus on defense.

Mythic’s History

Mythic began as a project at the University of Michigan, co-founded by Dave Fick and Mike Henry under the name Isocline. It developed chip tech that stores analog values on flash transistors and is designed to perform calculations in parallel without stopping, leading to performance and efficiency gains for AI applications. The startup then secured a number of projects through the U.S. Air Force’s Small Business Innovation Research (SBIR) program and eventually decided to pursue the venture capital route, raising over $170 million across multiple rounds.

Mythic’s first commercial chip, M1076, was built for computer vision use cases and attracted the attention of Lockheed Martin, whose corporate arm, Lockheed Martin Ventures, became a major investor in the startup. However, the startup was competing in a very crowded field and the global VC equity for semiconductor startups in 2022 declined significantly, leading to financial difficulty for Mythic and other AI chipmakers such as Graphcore and Habana Labs.

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Mythic’s Return from the Ashes

Mythic’s return from the ashes was made possible by an injection of fresh funds, with an $13 million financing round led by existing investors Atreides Management, DCVC and Lux Capital, alongside new investors Catapult Ventures and Hermann Hauser Investment. This tranche is a fraction of the startup’s previous raise, but Mythic claims that it will enable it to bring its next-generation product to market.

To make the most of the investment, CEO Dave Fick prioritized efficiency. Mythic now leverages more development partners and off-the-shelf components than it did previously, cutting costs and reducing the time to market. It also revamped its go-to-market strategy, returning to its roots with a renewed focus on defense.

A Growing Market for Defense

Critics might deride Mythic’s pivot to defense as opportunistic, but there’s no denying that there’s a wellspring of capital in the sector. After years of shunning investments in military and security-related tech startups, VCs have begun raising their profile in the sector as the U.S. attempts to gain an upper hand against threats from adversaries. In 2022, there was $7 billion invested in VC-backed U.S. aerospace and defense companies, putting the sector on track to surpass 2021’s record deal value of $7.6 billion.

Mythic’s processor is designed to deliver data center GPU performance into the size, power, and cost of practical long-run-time edge systems, which can be deployed for homeland defense and national security. Investors are enthusiastic about Mythic’s new direction, but time will tell whether it was the right decision.

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