Fungible was founded by Pradeep Sindhu, who co-founded Juniper Networks and helped shape modern internet routing, and Bertrand Serlet, who ran Mac OS X development at Apple. The pedigree was spectacular. The idea was right — data center networks were choking on CPU overhead, and a purpose-built Data Processing Unit could fix it. They raised $300 million. Microsoft bought them for $190 million in early 2023. The founders were world-class. The exit was below the watermark.
Founded
2015
HQ
Santa Clara, CA
Total Raised
$300 million
Founder
Pradeep Sindhu, Bertrand Serlet
Status
Acquired by Microsoft (2023)
Website
www.microsoft.comTHE ORIGIN STORY
Pradeep Sindhu had already co-founded Juniper Networks in 1996 and watched it become a multi-billion-dollar company that reshaped internet infrastructure. He founded Fungible in 2015 alongside Bertrand Serlet — the Apple VP who oversaw Mac OS X for years before leaving in 2011.
Their insight was that CPU cycles were being wasted on data movement and storage networking inside hyperscale data centers. They wanted to build a new chip category — the Data Processing Unit — that would handle storage, security, and networking offload so CPUs could focus on actual compute.
WHAT THEY ACTUALLY DO
Hardware and software sales to hyperscale data centers. Fungible built DPUs — specialized processors designed to handle storage networking, encryption, and data movement at line rate, freeing CPU cores for workloads they were actually designed for.
The pitch was a 10x efficiency improvement on storage I/O for companies running at hyperscale. Revenue would come from chip sales and associated software licensing.
THE PRODUCTS
The Fungible F1 DPU was designed for storage-intensive cloud workloads, handling NVMe-oF and distributed storage protocols at hardware speeds. The S1 was a storage-focused variant aimed at disaggregated storage architectures.
Fungible also developed the Data Center-on-a-Chip Architecture — a software stack designed to make DPUs programmable without specialized firmware expertise.
HOW THEY GREW
Raise enough capital to build out the full silicon platform, get one or two hyperscaler design-in wins, and use those as proof points to land the rest. Fungible raised aggressively and hired deep engineering talent from Broadcom, Cisco, and Juniper.
The strategy required patience from investors and long evaluation cycles from customers — neither materialized fast enough.
THE HARD PART
Getting hyperscalers to swap out existing networking infrastructure for an unproven chip. The qualification and design-in process at AWS, Microsoft, or Google takes years, not months.
Fungible's runway ran out before enough design wins could reach volume production. Microsoft's acquisition gave the team a home, but at a price well below what investors had put in.
MONEY TRAIL
Series B
2018 · Led by GV
$75M raised
Series C
2020 · Led by Norwest Venture Partners
$200M raised
WHO BACKED THEM
Investors included GV (Google Ventures), Norwest Venture Partners, and additional institutional backers. Total funding reached approximately $300 million before the Microsoft acquisition.
Related Profiles
Companies
d-Matrix
d-Matrix is another Silicon Valley chip startup targeting data center efficiency with custom silicon for AI inference offload. Both Fungible and d-Matrix bet that specialized silicon — not general-purpose CPUs or GPUs — would win inside hyperscale data centers. Fungible was acquired below its funding total. d-Matrix is still raising and building.
Tenstorrent
Tenstorrent and Fungible both represent the wave of infrastructure chip startups founded by engineers who had spent decades at networking and computing giants. Pradeep Sindhu came from Juniper. Jim Keller at Tenstorrent came from Intel, AMD, and Apple. Both companies bet that the data center silicon market was ready for disruption from below.
Head-to-Head
Compare Fungible vs another company.