Hailo (edge AI inference chip startup) achieves unicorn valuation on $136M funding round, validating specialized accelerator market.

Hailo, a maker of chips enabling artificial intelligence capabilities on edge devices like smart cameras and smart cars, raised $136 million in a Series C funding round, described as the largest in the edge AI chip space to date. The investment brings Hailo's total funding to $224 million and values the company at over $1 billion, making it Israel's latest unicorn. The round was led by Poalim Equity and Gil Agmon, CEO of Delek Motors, the sole importer of Mazda, Ford and BMW vehicles and products to Israel. Existing investors including prominent Israeli entrepreneur Zohar Zisapel, founder of the RAD Group and chairman of Hailo; Swiss-based ABB Technology Ventures; London's Latitude Ventures; and Israel's OurCrowd also participated. New investors Carasso Motors and Shlomo Group joined the round. As part of the agreement, former senior VP at Intel Corporation Mooly Eden joined Hailo's board of directors, and Eyal Waldman, co-founder and former CEO of Mellanox Technologies (sold to Nvidia in 2019 for $7 billion), joined its advisory board.

Hailo was founded in 2017 by Hadar Zeitlin, CEO Orr Danon, and Avi Baum, former members of an elite IDF tech unit. The company developed the Hailo-8 processor, designed to enable smart devices to perform sophisticated deep learning tasks such as object detection and segmentation in real-time with minimal power consumption, size, and cost. According to the company, the chip offers the "same performance for smart devices as that provided by large data center computers, paving the way for a future of smarter edge products." This year alone, Hailo doubled its customer base to more than 100 clients as enterprises increasingly seek AI solutions that empower sensors and smart devices.

Danon stated the company's goal for the new funding is to "expand and scale up its operations given the surging interest in its Hailo-8 processor, and grow its sales, customer support, and back-office engineering teams across the world." He added: "We also want to expand the offering itself, releasing new software products to enhance our offering and complement it while also accessing different markets and uses. And also developing the next generation of our technology — which is the biggest effort — and that is to expand both the portfolio that we offer and the addressable markets and products that we can target." The processor functions as "a fundamental element that does data-crunching for deep learning at the edge, and that is utilized to process data such as video, to perform real-time video analytics that can be used in the context of cars or driving assistance systems, or monitoring the quality of products on a production line, to secure perimeters for access control," according to Danon, who noted the processor "does all these tasks… with very low power consumption." Last summer, Hailo opened a wholly owned subsidiary in Tokyo and signed a deal with Macnica, a leading global semiconductor distributor, to sell its products in Japan.

Demand for advanced AI chips is accelerating as the tech world shifts from centralizing processing in the cloud to the edge, seeking to improve latency, cut bandwidth costs and provide more stable platforms independent of network connectivity. The global AI chip market was valued at $9.29 billion in 2019 and is expected to reach $253 billion by 2030, an increase of nearly 3,000% according to recent research. Mooly Eden stated: "In the coming years, AI will become the defining feature for creating new business value and reshaping user experience as we know it. The ability to bring AI-based features to market will increasingly be the deciding factor over whether companies succeed or fail. Hailo's innovative and hyper-efficient processor architecture addresses the growing demand for a new kind of chip to handle these new types of workloads, challenging traditional computing solutions." Danon said the company was "honored by this milestone round for an edge AI chip company and will use these significant resources to accelerate our aggressive plan to make advanced AI edge solutions more accessible to industries across the globe."

Hailo is based in Tel Aviv with offices in Taipei, Munich and Silicon Valley and currently has some 150 employees. Danon said he hopes to grow the team to about 250 by next year. Shoshanna Solomon contributed to this report.