French supplier of cutting-edge data processing solutions Kalray has decided not to merge with Israeli firm Pliops, which creates acceleration solutions for AI and storage servers in data centers.
The French company has said that it will not proceed with the merger, despite the announcement of the agreement to join two months ago. Since then, Kalray shares have dropped by more than 50%, and the deal was solely stock-based.
Since its founding in 2017, Pliops has raised more than $200 million from a number of well-known investors, including NVIDIA, AMD, Western Digital, SK Hynix, Alicorn, Koch Disruptive Technologies, State of Mind Ventures Momentum, Intel Capital, Viola Ventures, and SoftBank Ventures Asia. Following its August 2022 $100 million Series D financing, its most recent valuation ranged from $650 to $700 million.
According to the merger agreement, Pliops shareholders would own up to 35% of the new company, with that percentage possibly rising to 40% after meeting certain strategic goals. Kalray stockholders would own 65% of the new company.
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The value of the combined firm was estimated to be about 240 million euros, and the value of Pliops would be about $100 million, more than 80% less than the company was valued two years ago, even at Kalray’s market cap from two months ago of roughly merely $150 million.
“Economic conditions, and in particular financial market trends, were not conducive to finalizing a capital-intensive combination that would create value for shareholders,” Kalray said in its announcement. “However, the management teams of the two companies remain convinced that their technological strengths will complement each other to offer unified, cutting-edge solutions for generative AI (GenAI) and data acceleration in the storage sector. The parties will therefore study commercial ways of combining Pliops’ KV technology with Kalray’s MPPA architecture.”
Pliops was founded by Uri Beitler, Aryeh Mergi, and Moshe Twitto. It currently employs about 120 people. Last June, NVIDIA’s SVP of Chip Design, Ido Bukspan, took over as CEO in lieu of Beitler. Beitler was appointed Chief Business Development & Strategy Officer.
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Pliops has created technology that addresses the issue of sluggish processing performance as well as the quickly expanding volumes of data. The company’s data processor significantly streamlines data center storage and processing procedures.
About Pliops
Pliops is developing a new device that lets cloud and enterprise data centers access data 50X faster with 1/10th the computing work and power consumption. An innovative patent-pending method combines numerous inefficient layers into one ultra-fast gadget. Pliops’ solution addresses scalability issues caused by cloud data growth and AI/ML application demands.
About Kalray
Kalray is a top supplier of hardware and software innovations and solutions for high-performance, data-centric computing applications.
