Cisco Buying Chip Maker Luxtera for $660M

Cisco announced plans today to buy Luxtera, a semiconductor company, for $660 million to help meet its customers’ demand for internet bandwidth.

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Carlsbad-based Luxtera “uses silicon photonics to build integrated optics capabilities for webscale and enterprise data center, service provider market segments and other customers,” according to a Cisco statement. Translated, I think that means Luxtera uses some neat light technology to build optical tooling for enhanced big data transfer. Luxtera claims that its technology improves chip scale and performance while lowering costs.

Luxtera has raised a total of $130.7 million since securing its first venture round in 2002. But it’s been a while. Its last raise was in 2014 when Lux Capital put $37.4 million into the company. Meanwhile, Cisco has acquired more than 200 companies in its lifetime, according to its Crunchbase profile. Most recently, it acquired Ensoft, a UK-based network security company, and Duo Security, a Michigan-based security software company that had raised $121.5 million in funding.

In a blog, Rob Salvagno, head of Cisco’s M&A and venture investment team, pointed out what we already knew – that Internet traffic has grown dramatically over the past two decades and is only going to accelerate.

“…The exponentially growing demands on the network require a new era of networking,” he wrote. “The combination of Cisco’s and Luxtera’s capabilities in 100GbE/400GbE optics, silicon and process technology will enable customers to build future-proof networks optimized for performance, reliability and cost.”

The deal is slated to close in the third quarter of Cisco’s fiscal year 2019.

Illustration: Li-Anne Dias

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