Contents:
Market Perspective: Enterprise Generative AI Applications
Inside Our Portfolio: Q&A with Alelph Alpha's Jonas Andrulis
Pathfinder One-On-One: Pathfinder Team
Pathfinder 2nd Annual VC & Founders Mixer
Lightmatter and Ayar Labs Achieve Major Funding Milestones
Cohesity Becomes the World’s Largest Data Protection Software Provider
Don't Miss the Replay: Hybrid Classical-Quantum Workflows on HPE Supercomputers
Portfolio Company News
Welcome to the December edition of Pathfinder Insights! As the year draws to a close, we are excited to bring you the latest updates and insights from Pathfinder and the venture/startup ecosystem. In this final edition of the year, we feature a compelling lineup of articles. Our market perspective on Enterprise Generative AI applications delves into the opportunities, challenges, and innovations in this space, covering how AI is unlocking enterprise value, the varying adoption levels, infrastructure choices, and the uncertain pricing models that startups are navigating. Following this, an insightful Q&A with Jonas Andrulis, Founder and CEO of Aleph Alpha, highlights their groundbreaking work in AI and how the company is addressing complex problems in industry and government with a focus on data sovereignty, security, and regulatory compliance.
Reflecting on 2024, we witnessed remarkable growth and resilience in the venture capital landscape, with a significant surge in investment into AI companies underscoring AI's transformative potential across various industries. In our Pathfinder One-On-One, we highlight the trends and opportunities our team foresees in the coming year. From advancements in AI inference and FinOps solutions to innovations in data centers and AI coding tools, check out what the Pathfinder team is excited about.
On the networking front, our 2nd Annual VC & Founders Mixer was a resounding success with over 50 guests for an evening of networking and collaboration.
We are thrilled to celebrate the achievements of Lightmatter and Ayar Labs, two pioneers in AI infrastructure solutions critical to next-generation AI datacenters. Lightmatter completed a $400M Series D funding round, quadrupling its valuation to $4.4B as it continues to innovate on building wafer-scale photonic interconnects. Ayar Labs secured $155 million in financing, raising its valuation to over $1 billion. Notably, Nvidia, Intel, and AMD participated in the round—a resounding vote of confidence from three of the largest silicon vendors in the world, underscoring the transformative potential of Ayar Labs’ optical I/O technology.
Finally, Cohesity, a leader in data management software, completed its merger with Veritas’ enterprise data protection business, becoming the largest data protection software provider.
We extend our heartfelt wishes for a joyous holiday season and a prosperous new year and thank you for being part of the Pathfinder community.
Enterprise Generative AI Applications: Opportunities, Challenges, and Innovations
Generative AI entered the mainstream with the emergence of ChatGPT in 2022 and has rapidly transformed how we create and consume content. However, enterprises have been slower to adopt the technology due to concerns over data security, intellectual property risks, and costly integrations.
Undeterred, a new wave of “GenAI-first” solutions is gaining traction in the enterprise, automating tasks, enhancing efficiency, and driving new business models. Early adoption focuses on accessible, high-impact areas such as customer service, sales, and AI code generation, while more complex domains—like supply chain management—often require custom solutions.
At Hewlett Packard Pathfinder, we have been actively engaging with the GenAI startup ecosystem from the start, seeking opportunities to collaborate as a customer, go-to-market partner, and investor. In this blog, we explore the problems GenAI is solving, present a framework to categorize emerging players, discuss deployment options, and analyze the evolving yet uncertain business models of these innovators.
Click here to continue reading about how GenAI is reshaping enterprise applications.
Inside Our Portfolio:
Q&A with Aleph Alpha's Jonas Andrulis
Welcome to the latest edition of our series, "Inside Our Portfolio", where we engage in insightful conversations with leaders from our portfolio companies. This series aims to provide you with firsthand perspectives from those at the forefront of innovation and growth.
In this issue, Paul Glaser (Head of Hewlett Packard Pathfinder and Investor Relations) interviews Jonas Andrulis, Founder and CEO of Aleph Alpha, a Germany-based startup at the forefront of the European GenAI market. Aleph Alpha is pioneering AI solutions that prioritize data sovereignty, security, and regulatory compliance, and is partnering with HPE to deliver these cutting-edge technologies to enterprises.
PG: What does Aleph Alpha do?
JA: Aleph Alpha is an AI R&D startup founded in 2019 by industry veterans from Apple and Deloitte with the goal of bringing a new generation of capabilities to complex and critical problems in industry and government. We specialize in the kind of problems where human responsibility is paramount and the relevance of data, IP and value requires high priority for sovereignty, safety and control. For our customers in finance, manufacturing, government, and other core industries, we built technology that creates a foundation and drives innovation for the transformation into a new era of knowledge work.
PG: What are your priorities today?
JA:Since closing our $500 million funding almost a year ago, we were able to assemble a phenomenal team of executives and talent in research, product and customer-focused roles. The focus of our teams is now on innovation and opportunities in specific industries. With solid funding, revenues orders of magnitude higher, and our leadership team almost complete, we are now kicking our internationalization into gear. With this trajectory, I feel I’ve come closer to the advice a brilliant and incredibly accomplished entrepreneur once gave me: “It is the job of the CEO to do absolutely nothing.”
Click here to read the full interview.
Pathfinder One-On-One: Insights and Opportunities for 2025
We asked the Pathfinder team about the upcoming opportunities in 2025 they were most excited about. Each team member sees unique and transformative opportunities on the horizon, and we’ve gathered their insights to share with you.
Punit Chiniwalla: The shift from AI training to AI inference. This would imply a mass adoption of AI technologies both in consumer and enterprise domains and will have widespread impacts (1) on how applications are consumed (business model, enterprise impact, and everyday consumer behaviors); (2) on how the underlying infrastructure is valued (public clouds, private/smaller clouds, networking, personal access via edge devices like AI laptops, mobile phones, etc.); and (3) on the emergence of a likely new set of players of fast-scaling layers to challenge incumbents.
Todd H. Poole: As we all know, AI is impacting everything, especially in compute, infrastructure, and sustainability. I'm excited to see new innovations in compute (silicon, photonics, analog, quantum), advances in the data center (liquid cooling, interconnects and networking, power delivery), and progress in sustainability (energy efficiency, CO2, and GHG). AI has ushered in a golden era of innovation, and I'm excited to find and fund the next generation of enterprise technology startups working to solve fundamental problems in size, speed, power, heat, density, capacity, and throughput.
Shawn Ranjbaran: The evolution from large language models (LLMs) to orchestrations of small language models (SLMs) at the edge. Unlike LLMs, which require costly, broad-based training, edge-deployed SLMs can be trained on smaller, industry-specific datasets closer to the source. For inference, such SLMs will allow real-time processing without reliance on cloud resources, reducing latency and bandwidth costs. This evolution aligns well with industries demanding domain-specific AI that responds instantly and adheres to data residency and compliance requirements.
Jeff Chang: One area I'm particularly excited about is the ongoing innovation in healthcare driven by LLMs. These models are proving extremely effective at processing and making sense of vast amounts of unstructured data and healthcare generates more unstructured data than almost any other industry. This includes physician notes, patient records, medical literature, physician-patient interactions, commercial interactions, and more—much of which has historically been underutilized or simply uncaptured. I look forward to seeing startups continue to leverage LLMs and broader AI applications to improve efficiencies, ultimately improving patient outcomes and making healthcare more accessible and effective for everyone.
Domenic Giovanzana: I am excited to see how enterprises and SMBs will be optimizing their cloud spend. There is $200B of public cloud spend and 1/3 of it is estimated to be waste. Customers can benefit from adopting a FinOps solution from a startup to help with this massive problem.
Shehan Weeraman: Looking forward to 2025, I'm excited to see the advancements in the AI code assist space that will make AI coding tools even more powerful for developers. With increasingly advanced models, AI is reshaping software development by speeding up coding, improving code quality, and unlocking unprecedented levels of productivity and innovation.
Stay tuned as we continue to explore and invest in these transformative technologies.
Pathfinder 2nd Annual VC & Founders Mixer
Our 2nd Annual VC & Founders Mixer, held this October in partnership with HSBC Innovation Banking, was a resounding success. The event welcomed over 50 guests, including seasoned VCs and startup founders, for an evening of networking amid food and drinks at Tamarine in Palo Alto.
Special thanks to our co-hosts, Alina Zinchik and Jim Marshall of HSBC Innovation Banking, whose support was instrumental in making this event a success.
The mixer provided an opportunity for attendees to casually engage in conversations, discuss potential partnerships, and share insights. We are grateful to all the VCs and startup founders who joined us and hope that the conversations that started there will continue offline until we see everyone again at our next event. We thank everyone who participated and for being an integral part of our thriving community.
Lightmatter and Ayar Labs Achieve Major Funding Milestones
We are thrilled to congratulate both Lightmatter and Ayar Labs on their impressive funding rounds, reinforcing their positions as leaders in photonics and optical interconnect solutions for AI infrastructure.
• In October, Lightmatter completed a $400M Series D funding round. This substantial investment has quadrupled Lightmatter's valuation to $4.4B, solidifying its position as a photonics leader for next-generation AI data centers. The investment will accelerate the deployment of Passage™, the world’s fastest photonic engine, in data centers to meet the surging demand for AI computing infrastructure.
• This month, Ayar Labs secured $155 million in financing to bring the company’s total funding to $370 million and raised its valuation to above $1 billion. The new funding will help Ayar Labs address the urgent need for scalable, cost-effective AI infrastructure with its optical I/O technology, which aims to break down the AI bottleneck of data movement. This support underscores the potential of Ayar Labs' technology to redefine the future of AI infrastructure by replacing traditional copper interconnects with optical solutions, thus maximizing compute efficiency and reducing costs.
Cohesity Becomes the World’s Largest Data Protection Software Provider
Cohesity, a leader in data management software and a key startup in Pathfinder's portfolio since 2017, has completed its merger with Veritas’ enterprise data protection business, becoming the largest data protection software provider.
The combined company now serves over 12,000 customers – including more than 85 of the Fortune 100 and nearly 70% of the Global 500 – and protects hundreds of exabytes of data. Cohesity has become the fastest data protection company to reach $1.5 billion in revenue and offers advanced AI-driven insights, multicloud data protection, and a robust partner ecosystem.
Over the years, we have built a successful joint go-to-market partnership with Cohesity, driving innovation and customer adoption. By integrating Cohesity’s AI and security capabilities with Veritas’ extensive workload support, the company now delivers unmatched scale, innovation, and customer support. With a valuation of over $7 billion, Cohesity is well-poised to accelerate adoption, drive industry-leading solutions, and cement its leadership in the fast-growing data protection space.
Don't Miss the Replay: Hybrid Classical-Quantum Workflows on HPE Supercomputers
Pathfinder invites its readers to watch the replay of the "Munch and Learn Technology Talk: Hybrid Classical-Quantum Workflows on HPE Supercomputers" webinar, held in October. We would like to thank everyone who attended the live session. This event was a collaboration between Hewlett Packard Labs and Classiq, a leading quantum software startup and Pathfinder portfolio company.
This one-hour session provided an in-depth look into the advancements and future potential of hybrid classical-quantum workflows. It delved into the exciting prospects of combining quantum computing with classical supercomputing to tackle complex problems more efficiently.