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After the 7 billion dollars acquisition, the Israeli serial entrepreneur builds his next chip startup with Taiwan's semiconductor power
(3/10)Updates: Chain Reaction raised $70M Series C Round led by Morgan Creek Digital (Mark Yusko). The round will enable Chain Reaction to continue executing the first product line. It will also enable them to grow the R&D team for the 3PU (Privacy Preserving Processing Unit), and thereby to be first mover of privacy tech to cloud.
Co-founder of Israel startup Chain Reaction, Alon Webman, is also the co-founder of Mellanox Technologies, a multinational provider of computer networking equipment that was then acquired by NVIDIA for $7 billion USD. Eyeing top-notch talents and technologies, the startup works with the world's leading dedicated semiconductor foundry TSMC and opens its office in Taiwan. The ambitious startup desires to solve blockchain trilemma with its chip-enabled systems.
Dressed in sharp suits and shiny leather shoes, four men walked into the Business Next Media office. They are members of Chain Reaction, a semiconductor company focused on accelerating blockchain and privacy-preserving technologies. The sophisticated levels of devices are aligned with those of outfits.
Alon Webman, the co-founder, started Mellanox Technologies in 1999. Nurturing the startup into a leading multinational supplier of interconnect solutions and services, Webman gained more than 2 decades of valuable experience in building a startup from the ground up. He at first concentrated on chip designing and engineering, then touched on business development, ranging from fundraising, marketing, and most importantly, fostering relationships. In 2019, Nvidia announced its acquisition of Mellanox Technologies for a transaction value of $7 billion.
While working at Mellanox Technologies, Webman has partnered with the No.1 chip manufacturer Taiwan Semiconductor Manufacturing Company(TSMC) closely. He also builds a strong friendship with Richard Lu, who was then TSMC’s head in North America Southwest sales region. When Webman heard of Lu was about to retire, he reached out to him immediately. “Richard has been an excellent partner for years, the exact figure that our team needs,” said Webman. Introduced to blockchain technology by Webman, Lu became optimistic about the future blockchain market. He joined Chain Reaction to manage the business expansion of the startup, accumulating contacts from the IC design industry all over the world.
When Webman launched his second startup, he teamed up with Oren Yokev, his classmate from the Technion - Israel Institute of Technology. Yokev has led the technology unit of the Israeli prime minister’s office for more than 21 years, specializing in cyber security and R&D team management. Despite the totally different career paths, the two old friends see eye to eye with each other on a vision: start innovation from scratch and run it in the front seat.
They make use of their advanced computing technology expertise and take further attempts in the blockchain industry. “Many people in our team could have retired at the moment, but we chose to fight alongside,” said Webman.
Joseph Chen and Malcolm Chen, who have also been dedicated to semiconductor for years, also came on board later and respectively serve as senior director of ASIC global supply chain management and senior director of global sales. Before Joseph Chen joined the team, Webman flew from Israel to California, just to talk to him in person. The idea of “Starting from zero to one”enchanted him a lot, and the journey to No.1 is enjoyable,”according to Joseph Chen.
“Relationships, relationships, and relationships,” said Lu, “those are the key takeaways from my 21-year working experience in TSMC.” Webman could not agree more with it. The members of Chain Reaction form tight relationships, as they talk lively and jovially with each other during the interview.
Chain Reaction now grows its global team to 120 people, who have previously worked at tech giants like TSMC, Nvidia, Intel, Qualcomm, Dell and so on. “You should first know how to build your own DNA,” said Webman, The startup has a great vision of turning into a giant but has a culture of gratitude, which is not commonly seen in companies”, according to the CEO of Chain Reaction.
Chain Reaction holds answers for Blockchain Trilemma
With its team DNA successfully formed, Chain Reaction now combines Application Specific Integrated Circuit (ASIC) design, and encryption algorithm with TSMC’s cutting-edge manufacturing process, honing the competitiveness edge.
“We are running ahead of the market,” said Webman. The strategic product of Chain Reaction focuses on the privacy and security of the cloud and data center, which also aligns with increasing demand. “Cloud today is still considered untrusted,” said Webman, “therefore many available businesses lie in privacy enhancement to the cloud system of enterprises. Transforming an untrusted environment into a trusted one requires high volumes of computing. The privacy processor developed by the Israeli startup can outperform current software or hardware solutions in the market by 10,000 times, said Webman with confidence.
With their solutions, users can operate on top of the encrypted data, while the results of the operation are still in the cloud and private. The key is to encrypt the data every time the computation occurs, which could only realize by high-performance ASIC chips.
Another product Chain Reaction will launch soon is the blockchain hardware with enterprise-level BTC hashing ASIC and systems, which deals with data processing and computation for validating Bitcoin mining operations. With delicated ASIC and Technology in hands, Chain Reaction works with partners commited to green energy and carbon neutral goals.
“It’s a promising business worth billions of dollars ahead of us,” said Webman. Bitcoin is known as digital gold, as the mining of the coin requires refined hardware to solve complicated computations and mathematical problems. Every day, 900 bitcoins are mined out of a finite total supply of 21 million, according to Earthweb. The criteria to win the mining are efficiency and cost, said Webman. Chain Reaction develops machines that reach 50% higher efficiency than most machines in the market, which secures absolute advantages when it comes to the booming market. The startup will launch the sales of BTC Hashing system in 2023.
Chain Reaction teams up with the Taiwanese government to train future engineers
These elites across Israel, the US, and Taiwan, along with cutting-edge technologies, are upgrading their organization and staffing. They opened a new office in Hsinchu Science Park, Taiwan, where industrial clusters and a large pool of high-tech talent locates.
Connected to TSMC and Taiwan’s strengths in manufacturing, Chain Reaction regards the island as a strategically important spot for research and development. “Our teams are growing fast, in Silicon Valley and Hsinchu,” said Webman. The co-founder also stated that borders or timezone shall not impede the startup, as the team sticks to the focal point altogether.
Although in the semiconductor industry, Chain Reaction hires lots of young engineers and provides chances for promising students to do intern jobs. “It’s a really good combination of the team, that you got to grow all the time,” said Webman.
Foreseeing the long-term demand for talent, Chain Reaction collaborates with Taiwan’s National Science and Technology Council for the “X talent” program, nurturing the engineer trainees for the industry. The Taiwanese graduate students who get selected will be sponsored to experience working with Chain Reaction in Isreal or Silicon Valley.
People are asking what’s the next technology in five years. It shall be information and data, exactly what Chain Reaction is dealing with, according to Webman.
The article is supported by National Development Council
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