Expon Capital invests in Technology Cutting Energy Consumption of World’s Largest Clouds & Datacenters reducing CO2 emissions by 100 million tons a year in 2025

We came across Pliops (www.pliops.com) serendipitously while having lunch with a VC friend in Tel Aviv, and discussing each other’s venture investments. Because of our history with flash memory (one of us had invested in M-Systems back in the day, the pioneers of SSD), and the exciting space it represents, we were enthusiastic to meet with the founders at their office in Ramat Gan the following day. The Company is managed by an all-star management team with vast experience in SSD controller development and semiconductor technology from industry leaders (Samsung) with successful exits in Israel, i.e. M-Systems (acquired by SanDisk/WD for 1.6bn USD), Anobit (acquired by Apple for 385m USD), Densbits (acquired by Broadcom) and Xtremio (acquired by EMC for 400m USD). Together they form a highly capable, yet humble, committed, hardworking, motivated, and ambitious team, fully aware of the magnitude and complexity of the task at hand.

At its core, Pliops is not just any stepwise technology. This will create a fundamentally new way to manage flash memory.

What got us really excited is that the scale and urgency of the pain point Pliops addresses is extremely large, acute, pervasive, and growing. The problem for cloud and datacenter operators (especially hyperscale datacenters “Hyperscalers” or “Super 8” : Amazon, Microsoft, Google, Facebook, Alibaba, Baidu, Tencent and Apple) is the explosion of data storage and its consequences. Unstructured data in particular (e.g. videos, pictures, music) is driving exponential growth in demand for data storage. The energy consumed by datacenters globally in 2014 accounted for 2% of the total world energy consumption, it has now increased to over 4% and could reach 20% by 2025 if nothing was done (source: Total Consumer Power Consumption Forecast, Dr. Anders S.G. Andrae (Huawei)). The growing instability of cloud performance further compounds this problem. Only brute force fixes are available today, none of which holistically solve the problem. That’s why operators will not stop looking for solutions.

We did not expect to find that datacenters would potentially consume such a big part of world energy when we started researching the market for Pliops. There are two main issues resulting from this exponential growth: 1) humanity has no capacity and no plans to build enough energy production infrastructure to satisfy such needs and 2) this 20% comes on top of existing CO2 emissions and goes against the goals of the Climate Change Accords. If we cannot or do not want to create any additional energy production capacity to serve this market, this means cloud operators have no other solution and are in urgent need of dramatically reducing the energy consumption of datacenters (UN Sustainable Development Goal 7& 12).

Pliops’ solution is applicable to 90% of cloud use cases (managed by Super 8) and many other storage solutions (All Flash Arrays, Software Defined Storage). Its Total Addressable Market is conservatively estimated to be 3bn USD by 2021, expecting to double every 4 years. The company is not alone in trying to solve the above issues. The team placed itself in an enviable position with only limited and indirect competitive solutions.

The company’s 35m USD Series B round was led by Softbank Asia (Korea), with participation from SOMV, Viola Ventures, Intel Capital, Western Digital, Xilinx and Mellanox and Expon Capital.

Global VC investing in big ideas with the potential for positive impact & exponential growth

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