Computer hardware manufacturer Lightmatter continues to redefine the chip sector via innovation and a refined business model. The company remains a pioneer in AI chip development, firmly positioning itself within the $600 billion AI market. As the firm continues to expand its research and product offerings into photonic computing, demand for its IPO has increased. However, it’s privately held, meaning that pre-IPO shares are your only option. Here’s how you can navigate the market to access Lightmatter Pre-IPO shares.
What is Lightmatter?
Lightmatter entered the market in 2017 and is based in Mountain View, California. Its founder and CEO, Nick Harris, holds a PhD in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology (MIT), where he specialized in photonic computing. This experience allowed Harris to push the boundaries of this technology, opening the door for ultra-performance computing on a personal level.
Photonic computing differs from today’s system in that it doesn’t rely on electrical signals to transfer data. Instead, it utilizes optical signals via photonic chips and lasers. This approach provides higher efficiency and better performance than traditional chipsets, making it ideal for use in today’s high-end AI systems.
Lightmatter offers a variety of products ranging from individual Chiplets to expansive Multi-Chiplet architectures. Also, it recently expanded its operations to include a purpose-built software stack designed to support standard deep learning frameworks. These systems can connect AI chips in a streamlined manner, pushing performance up.
The process utilizes the company’s Passage WDM bidirectional links and ultra-dense fibers. Once connected, systems can scale up the domain by as much as 30x. These technical capabilities, paired with Lightmatter’s track record of innovation, strongly position the company for future revenue growth.
Historical Funding Rounds
Summary of Lightmatter Funding:
Total Funding: Lightmatter secured $850M over 9 rounds
Largest Round: Lightmatter’s largest funding round secured $400M on Oct 11, 2024.
Investors: A total of 14 institutional investors back Lightmatter
Latest Round: The latest funding round was a Series D round held on Oct 11, 2024, that secured $400M
Funding Rounds Breakdown:
- 4 Late-Stage rounds
- 3 Early-Stage rounds
- 2 Grant Rounds
Key Investors:
Lightmatter lists 14 institutional investors as its main backers. Specifically, T. Rowe Price, Google Ventures, SIP Global Partners, Viking Global Investors, Aliya, Hewlett-Packard Enterprise, Lockheed Martin, Spark Capital, Hewlett-Packard Pathfinder, and Matrix participated in the funding. The project also secured grants and support from Harvard Innovation Labs and MIT.
Funding Data is Sourced from Tracxn
Why Invest in Lightmatter?
There are a lot of reasons why someone would consider investing in Lightmatter. For one, the company’s products are in huge demand. Currently, the computer industry has a problem. Chips keep getting bigger. The reason for the growth in physical chip size is due to the fact that manufacturers have hit the physical limitations of transistors. As such, to add more power to a chip, you have to make it larger.
Source – Lightmatter
Lightmatter introduces a solution in the form of silicon photonics. These chips don’t rely on transistors. Consequently, they can be made much smaller while improving performance. This product will allow AI developers to create small, capable devices that can power advanced chatbots, image generators, and other AI applications.
Market Leader
Lightmatter is a leading innovator in AI photonic computing hardware. It currently ranks 1st among 17 competitors on Traxn. Notably, the company combines electronics, algorithms, and photonics, paving the way for more powerful AI systems.
The AI market is predicted to increase in value by 5x within the next 5 years at a CAGR of 37.3%. Lightmatter continues to carve out a niche as the premier AI photonics computing hardware manufacturer, opening the door for future revenue.
Unlock the Full Potential of AI
If you think AI systems are impressive now, imagine how they will be in the next decade. For these systems to grow at their expected rate, computer hardware needs to be upgraded. Lightmatter offers the industry a roadmap and products that support creating and utilizing massive, high-performance neural network models and more.
The push to integrate AI systems is on the rise and for good reasons. Firms like Netflix continue to rake in massive profits ($1 billion annually) from their AI options, like personalized recommendations. To support these systems, there needs to be faster hardware. Here’s where Lightmatter dominates.
The company always pushes the boundaries of innovation. They recently announced two AI-specific products that have the potential to be game changers. The Interposer product streamlines connecting AI chips via a purpose-built layer, increasing performance. Another innovative product is the Chiplet, which is designed to be placed on top of AI chips to enable photonic interconnectivity within a system.
Strong Partnerships
Lightmatter has several high-level partnerships. The company recently collaborated with the Global Semiconductor Alliance (GSA), Optica, and others to push for more AI adoption. By working with leading industry organizations, the manufacturer can ensure its products meet the community’s demands.
Sustainability
There is a growing number of obsolete computer hardware filling up the landfills. Outdated computers are bulky and aren’t easy to dispose of without causing environmental damage. The photonic approach allows engineers to create smaller AI hardware, reducing its impact on the planet. This strategy enables the company to significantly reduce data centers’ carbon footprint and operating costs.
How to Buy Lightmatter Pre-IPO Shares
Lightmatter remains a privately held company that has not announced any plan to host an IPO in the future. Consequently, you need to utilize a specialized approach to get access to shares. Here is what you need to consider.
1. Pre-IPO Secondary Marketplace
Secondary markets are purpose-built exchanges that connect pre-IPO shareholders with potential investors. These marketplaces can offer these assets because they work closely with employees, early-stage investors, and venture capitalists, who are crucial to the company’s pre-IPO growth.
Investing in pre-IPO shares of Lightmatter could open the door to additional returns if the company’s public valuation exceeds the price at which you acquired your pre-IPO shares. It is common for company valuations to increase following an initial public offering (IPO). As such, it makes sense to add pre-IPO shares to your portfolio before the firm announces plans to go public.
Secondary marketplaces have many requirements. Here are some concerns you should be made aware of:
Eligibility: Notably, this approach requires you to be an accredited investor, meaning you will have to show at least $1M in liquid assets to qualify.
If you meet the requirements and are comfortable with the risks, several platforms offer access to pre-IPO opportunities:
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Forge Global: One of the largest private stock marketplaces, offering shares in late-stage startups like SpaceX, Stripe, and Databricks. Minimums typically start around $100,000.
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EquityZen: A popular platform allowing accredited investors to buy into private companies with minimums as low as $5,000. Past offerings include companies like Discord and UiPath.
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Rainmaker Securities: A full-service broker that helps source and negotiate private share sales, including opportunities in companies like OpenAI, Stripe, and Palantir.
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Hiive: A newer platform with live bid/ask pricing for hundreds of private companies. Transparent and low-fee, with minimums starting around $25,000.
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MicroVentures: Offers pooled access to late-stage companies through special purpose vehicles (SPVs), including past investments in SpaceX and Instacart.
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EquityBee: Allows investors to fund employee stock option exercises at startups, often at discounted valuations, with minimums around $10,000.
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Augment: A digital-first marketplace showing real-time pricing for pre-IPO shares, targeting tech-savvy investors and offering lower transaction fees.
- StartEngine Private: Launched in late 2023, this platform offers accredited investors access to Regulation D offerings in later-stage, venture-backed companies. In its first nine months, it generated $16.5 million in revenue, with average investments around $32,000
Important: Always perform thorough due diligence and consult a financial advisor before investing in private company shares.
2. Private Equity Firms
Private equity firms gain access to pre-IPO shares during investment rounds. They then offer these shares to high-net-worth accredited investors with a commission. Notably, private equity firms are known to have extra stipulations, including blocking the sale of shares for years in some cases.
3. Employee Equity Sales
Many consider employee equity sales as the best way to acquire pre-IPO shares in Lightmatter. This method of acquiring pre-IPO shares requires you to connect with former employees. It’s common for companies to issue shares as part of an incentive package. Notably, this profit-sharing method has become more popular, leading to more pre-IPO share opportunities for investors.
Private Transactions: There are a lot of hoops you will need to jump through to complete a private pre-IPO transaction, including creating specific legal agreements, conducting valuations, and setting in place any limitations on the transfer of the asset.
Brokerage: Brokers will take a lot of the confusion out of the pre-IPO process. These professionals can guide you through each step, ensuring full compliance and avoiding common errors untrained professionals make.
There are several risks that you should consider before jumping into the pre-IPO shares investment arena. Here are the top concerns:
Liquidity Risk
If you are looking for an asset that you can sell right away, pre-IPO shares are not the best option. These investments can include sales and transfer clauses that prevent the transfer of the asset until certain criteria are met, such as the completion of the IPO. It’s even common for pre-IPO shares to require you to wait years before gaining the ability to sell your assets.
Regulatory Risk
The AI hardware industry may become subject to increased regulation regarding data privacy, energy efficiency, and international export controls. Any shift in government policy or global trade restrictions could affect Lightmatter’s operations and valuation.
Market Risk
Lightmatter’s success hinges on the continued adoption of photonic computing and high-performance AI chips. If the market shifts toward other architectures, or if funding for AI hardware slows, the company’s growth potential could be impacted.
Valuation of Lightmatter and Future IPO
Lightmatter received a valuation of $4.4B on October 16, 2024. This valuation qualifies the company for Unicorn status. Lightmatter achieved this valuation due to a variety of factors, including its forward-looking stance, strong product line, and market positioning.
Lightmatter remains a privately held company. However, if the company were to announce plans to go public, it would be met with strong support from both private and institutional investors. For a company with an estimated 191 employees and two offices in Boston and Mountain View, its dominant position in the market speaks loudly to its products’ quality and demand.
A Lightmatter IPO would give the public a chance to gain exposure to the growing photonic computer market. Given the company’s history and current position within the growing AI industry, it’s easy to envision their IPO hitting a record status. For those who hold Pre-IPO shares, this decision could represent a lot of potential revenue.
Investing in Lightmatter Pre-IPO Shares: Conclusion
Investing in Lightmatter opens the door for you to become part of the AI revolution from the hardware perspective. Remember, no matter how powerful AI systems get, they will always need the hardware to operate. As such, Lightmatter fills a niche within the AI market – those seeking smaller and faster systems that can support larger models.
Be sure to do your research on the company and its history before making any investment decision. It’s recommended that you consult a financial professional to ensure that you stay within your risk appetite when trading pre-IPO shares. Notably, if Lightmatter succeeds in its quest to become the hardware powering the AI revolution, it could represent a major windfall for Pre-IPO shareholders.
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Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Pre-IPO shares are typically available only to accredited investors and carry significant risk. Always perform thorough due diligence and consult a financial advisor or legal expert before making investment decisions.