Oxide Computer raises $445M (SEC Form D)
sec.gov
sec.gov
2023: Series A 44 Million https://oxide.computer/blog/oxide-unveils-the-worlds-first-c...
2025: Series B 100 Million https://oxide.computer/blog/our-100m-series-b
2026: Series C 200 Million https://oxide.computer/blog/our-200m-series-c
2026: Series D 445 Million https://www.sec.gov/Archives/edgar/data/1795071/000179507126...
(when older words are good enough, why invent a new word. but I see that as a trend. each new generation wants to distinguish themselves from the past one. So they invent new words as one way of doing that. and some of them get adopted into general circulation or use.)
Unless the two words, fan and fanboy, mean the different things, which i'm not interested in checking out anyway.
Also interesting from their Series C press release from earlier this year:
> With this large Series C, we have entirely de-risked capital going forward, which in turn assures our independence.
>I don’t know who needs to hear this
Plenty of people on this forum need to hear it. Because they think otherwise.
>but raising a ton of money is not success.
Yes. It's not even an accurate predictor of future success.
>With this large Series C, we have entirely de-risked capital going forward, which in turn assures our independence.
Independence from whom?
If they mean from everyone, they left out two important categories:
The Series C givers.
The other big C. Customers.
But they are not independent though, they will be owned by Wall Street should they go public.
Instead they remain in the private markets for a long time and sell secondary shares, just like what Stripe is doing.
I hope they never go public for the reason that Wall Street would own them.
That depends on how much equity they issue as public stock. (And stock classes and voting rights, but you get the idea.)
You don't raise this much money this fast without having some success to show the investors.
Oxide raising this much money is a big accomplishment.
I’m pretty sure the dotcom bubble had many counterexamples
https://en.wikipedia.org/wiki/Webvan
>Bankruptcy
>The company lost over $800 million and shut down in June 2001, filing for bankruptcy and laying off 2,000 employees.
>Reasons for failure
>CNET named Webvan one of the largest dot-com flops in history.
So what might look like success in this environment might look very different if the bubble pops.
Obviously Oxide has a ton of experience on its side but it's so opaque where any of this goes that even they can't read the tea leaves.
- like why wont you fund me a few million dollars to build my deep edtech startup
- like what guarantee does this guy give you which i cant
Apple is now having that aura, only because they got really really lucky before the money collectors shown up at the door.
Why not the vertical integration of Oracle Solaris servers, IBM vertical integration of IBM i, z/OS or z/TPF, Unisys vertical integration of Clearpath MCP or OS 2200?
I think perhaps Solaris had a bit of that under Sun but I can't imagine that being the case under Oracle. And I'm not really an enterprise infra guy so can't really speak to IBM or Unisys offerings.
The others suffered "ecosystem collapse". With Oxide you won't be stuck on a "burning platform", your main risk is that the value prop for the hardware & management experience doesn't play out.
Oxide costumers want to run standard VM that they normally run in public cloud.
Do Oracle Solaris serves come with a horizontal scale out cloud infrastructure? As far as I know they don't.
In the last round Bryan and Steve talked about being over-subscribed, especially from existing investors in prior rounds. That likely means those investors see exactly what I've described: a winner that's worthy of additional funding to pump their total return on investment.
They probably will be aquihired by someone like Broadcom.
The customers will have to deal with it, of course. At least they bought physical systems instead of renting them, so they can use them until they're obsolete.
> So if we didn’t need to raise, why seek the capital? Well, we weren’t seeking it, really. But our investors, seeing the business take off, were eager to support it. And we, in turn, were eager to have them: they were the ones, after all, who joined us in taking a real leap when it felt like there was a lot more risk on the table.
> ...
> Our intent in starting Oxide was not to be an acquisition target but rather build a generational company; this is our life’s work, not a means to an end. With our Series C, customers don’t have to merely take our word for it: we have the capital to assure our survival into the indefinite future.
Maybe you could read that and think its complete bullshit and they're lying their asses off. Considering the people behind Oxide and their history, that's vanishingly unlikely though.
The reasonable conclusion is that they would not have raised yet more money if it wasn't due to being offered very generous terms by investors who wouldn't threaten the long-term future of the business.
They've raised a lot of money and there will be pressure for an exit sooner rather than later.
You can be cashflow positive and still benefit from having a larger pool of cash to throw around, particularly in any situation involving hardware manufacturing.
If you tell your investors "our limiting factor is how fast we can spend to deliver on additional requirements for these new customers", then it can both be true that you're not going to miss payroll for 5 years no matter what happens tomorrow and more cash would be beneficial.
The idea behind VC funding generally is that you need large infusions of capital to get to the point where the business becomes sustainable long-term. The first one is the most expensive, and so on. Hardware is capital-intensive compared to SaaS, and especially so in the current environment.
edit/update: and the Samsung acquisition was in 2016. So I'd hope the CTO would have _some_ involvement in that decision.
To answer these questions (or accusations?): Yes, I was at Joyent for the acquisition by Samsung -- but I also was not a founder, did not have a board seat, etc., so the involvement that I had, while substantial at some level (working with the Samsung team when they were doing their significant due diligence, for example) was also ultimately limited. My job was to make the acquisition work, not to determine the fate of the company for which I was ultimately an employee.
It's also absurd to call the sale a "sellout" -- the company was not for sale when Samsung came calling. The deal that Samsung proposed was a good and fair one, and if I HAD been on the board, I would have absolutely voted for the acquisition. (It should be said that Samsung themselves had a very high threshold to close the deal -- 97% of shares IIRC?)
And all of THAT said: while I was supportive of the acquisition by Samsung of Joyent (and worked hard to make that acquisition work), when we started Oxide, Steve and I had (and have!) zero interest in building a company to be acquired. Oxide is our life's work (and I mean that "our" broadly, as many at Oxide feel that same calling), and our objective with Oxide is to build an independent, generational company. Indeed, this Series D is all about advancing that objective!
While I practically never agree with the guy, Thiel did say that "every startup is a conspiracy". Which is just another way of saying that every business is a conspiracy. The Oxide "conspiracy"[1] is to divert a chunk of the enormous economic surplus that is being captured by Amazon (and Broadcom, and others), and in the process, put some meaningful amount of that surplus in the pocket of the customer (otherwise, there is no reason to switch).
This is an incredibly ambitious goal, that cannot be achieved without upfront capital. Part of it is certainly hardware (which is getting more expensive, rapidly, and so it might make sense to buy years-worth of it), but another part is the _switching cost_ (which the _challenger/conspirator_ usually has to cover for the customer). That cost can easily be measured in the millions of dollars (Dropbox, famously, migrated off of AWS, via a client-side reupload, because moving the data from AWS to their own DCs was prohibitively expensive[2]).
Also, WW3 is slowly unfolding. The only reason energy prices are not in "brownout territory" is because (IIUC) the world's largest oil consumer is importing half as much oil from the mid-east as it used to. A few of the things that I buy, have _not_ gotten more expensive in euros, but they have gotten more expensive in dollars (by around 5% last I checked). If you need to use dollars to stockpile input-goods, now is the best time to do that, if you anticipate that the dollar will lose value over the next year.
A similar logic applies to selling a company. Amazon, in 2016, was already on the path to _massively_ improving the performance of its VMs and cloud services (via using more SSDs, building custom hardware, etc), and bare-metal performance was one of the Joyent selling points. With the resources of a company like Samsung, Joyent could also (potentially) use faster hardware, etc.
However, even under the aegis of Samsung, some (let's call them) _political asymmetries_ could not be avoided. I cannot talk about _internal_ asymmetries, but _external_ ones are already public knowledge. In particular, in 2017 or 2018, spectre and meltdown CPU-exploits hit the industry. All the major cloud providers had advance knowledge of this (and were able to mitigate via KPTI), except for Joyent (who had to work with the OpenBSD community for a few months to fix this). In those few months, if customers wanted to be completely safe, they would have had to move their instances to a different cloud. It is unclear (to me, because I am an engineer and not an accountant or account manager) if Joyent could have survived that without being part of Samsung.
And by the way, this would not have been as urgent of a problem, if Joyent was selling physical machines (like Oxide is, right now), instead of renting them out to multiple tenants. Imagine if an adversary could just spin up a VM right next to yours on the same exact machine. Even without spectre and meltdown, they could probably impact the performance and latency of your VMs indirectly, if they were willing to spend enough money. I once did this by accident (because I, foolishly, overestimated Google) on GCP, via their lambda-equivalent, and found out when they told us that those workloads were moved to a different DC. So if this is a problem for _Google_, it's a problem for everyone.
For at least the last decade, HN has consistently (but, thankfully, not exclusively) been attacking Joyent (and now Oxide), for various perceived misbehaviors[3], while frequently letting much less ambitious projects off the hook. Engineering any meaningfully new or disruptive technology is a very challenging marathon, and doing so, in business circumstances (which can only be characterized as: circumstances where the other runners are armed and always out to get you, while sometimes, the universe itself decides to send a few lightning bolts and storms in your direction) is almost impossible, without either (1) a monopoly, like MSFT and GOOG and AMZN enjoy, or (2) massive amounts of investment-cash that can only come from a very smart and very keen sugar daddy[4].
[0]: I can't recall who said this, but someone at the time said, they were tired of buying Bezos a BMW every month (via their AWS bill). Sometimes, it wasn't even an issue with the size of the bill: Amazon competes with many, many companies out there.
[1]: Based on various public statements. So basically, the Joyent conspiracy, but this time on-prem (so maybe Joyent + Fishworks = Oxide), and with fewer faulty drives (IIRC, there was a batch of drives, worth a huge amount of money, that had bad firmware, which caused their throughput to drop sporadically -- the exact details escape me, but you can see why there is a distrust of firmware written by others (also worth noting, is that this HDD vendor did not even offer to replace the faulty drives, but instead offered a marginal discount on the next order)).
[2]: Not because of any real, physical cost, but because Amazon bills you for every byte that leaves their datacenter (but not for any byte that enters).
[3]: I think it started when Joyent did not honor the "lifetime storage" promise that it made to its customers from the 2000s.
[4]: If anyone knows any wealthy heiresses that are looking to get married (or for a concubine), in exchange for financing my ambition to build an invention that is simultaneously (1) the last invention humanity will ever need, and (2) the invention that humanity needs most urgently, please hit me up. I have a sense of humor and am hung AF.
Sun would have died, everything completely lost among creditors and that would be it, end of story.
However given their track record designing programming languages, thankfully that did not happen.
They could also have fired a lot of people and likely survived. But the CEO clearly had no interest in that path.
I am using computers since 1986.
In the "Background of the Merger" section of that document, there is an incredibly detailed (and interesting!) story of three companies: Party A, Party B, and Oracle. (As was well-known at the time, Party A is IBM and Party B is HP.) As that narrative makes clear (and contrary to your assertion), it was Sun that rejected IBM's definitive agreement, not the other way around. You can certainly argue that IBM's acquisition of Sun would have failed to complete for other reasons (regulatory and so on) -- but your assertion that "IBM did an offer that was shortly thereafter withdrawn" is simply (and demonstrably) wrong.
[0] https://www.sec.gov/Archives/edgar/data/709519/0001193125091...
I feel like Broadcom with its VMWare acquisition could easily take these guys out if they wanted to (or for that matter, any OEM that has a line of servers + network & storage hardware). They don't, most likely because there isn't actually enough profit to be made there (Oxide having to raise money multiple times might be a hint).
Depends on what you mean by that. Broadcom cremated a lot of VMware's goodwill in the market.
There's a reason Apple is consistently one of the top 5 most valuable companies. It isn't because their hardware does anything that can't be done on "commodity" hardware, its that they built a software stack that "just works" and part of that was tight coupling to the hardware.
I've written on this before but Oxide are sitting in very narrow market segment in terms of value and I can't see how it's viable.
You may not have heard, but the US government just prints money.
Banks make a lot of it, too.
I suspect part of this raise has to with Antropic using Oxide at pretty large scale.
If its really true that things will move from public cloud to private in large scale, its not narrow at all.
And they have a pretty clear fitting product range they can expand into.
Yes, custom hardware is a significant part of Oxide. You have to build your own to do that stuff, and that’s why they did. I alluded to some of the things upthread.
I found out about this round from this thread, just like everybody else, but
> Oxide having to raise money multiple times might be a hint
That’s not the only reason to raise a round, by far, especially when you, you know, are building custom hardware. It isn’t a SaaS business.
EDIT: here’s another commentor with an example of this: https://news.ycombinator.com/item?id=49176704
It was technically possible with (e.g.) OpenStack for years (decades?) before Oxide ever existing, and yet even with such a solution being around, some folks still went with Oxide. (Or, depending on the scale you want to talk about: Proxmox, XCP-ng.)
Bryan has a good take on the incentive structures holding back commodity hardware vendors: https://m.youtube.com/shorts/O8GSWKpK79s
Oxide exists in part because commodity systems don’t work for building a cloud at scale (Joyent). Similarly, AWS, GCP, and Azure don’t use commodity systems, they use hardware that was designed to work together with their software, Nitro being a prime example.
Managing 100s of devices from a mix of vendors is possible becomes itself a massive ball of crap to stick all the pieces together.
Then add firmware management because now there is a plethora of firmware updates to worry about.
And then dealing with networking discovery & orchestration for such setups is an added horror few even try to visualize.
Then abstract all these differences away so one can provision two different vendor’s servers connected to two different vendor’s managed switches in different racks to a new VLAN. And do it with SR-IOV while you’re at it…
Oh, I forgot shared storage… details, details…
Commodity computing is the modern day Tower of Babel.
Yes, it can be done much simpler if one treats all switches as unmanaged, all storage as local, and all networking as flat. That’s just not acceptable for a lot of use cases though…
Also forget Dell. Check out DataPacket.com and other metal hosters. You don’t need to physically rack unless you are huge or have special hardware or security needs.
The cloud industry has done an incredible job at a kind of soft pervasive propaganda that running stuff is “hard.”
These are business decisions, made in terms of core competencies, capex vs. opex, and the difficulties and cost of building out a reliable, sustainable hosting operation that handles all the compliance and security requirements, and the full range of “ilities” that real businesses have to deal with.
The fact that Bob in IT might be capable of doing some of this on his own doesn’t really enter into the picture. It’s not relevant.
There’s a reason that most companies don’t operate their own electricity generation systems. Much the same is true for computing systems.
(Those were all firsthand examples; I'm not saying everyone needs cloud providers, but there are reasons beyond "really good salespeople" that people opt for offloading those logistics.)
Also building high complexity systems that require a big expensive cloud engineer staff gets you status and visibility. In a tight spot you can still blame AWS for problems.
(Reality is not quite so bleak as people are not completely cynical)
You dont even have extra organizational overhead. Every cloud first company has a head of devops sitting in the chair where head of infra would be. They somehow wind up with like half the staffing anyways compared to running bare metal.
Or something as stupid as, "vendor requires $50 failed DIMM replaced under warranty to be returned by UPS instead of chucked into the e-waste bucket, but UPS cannot pick up from DC because the driver can't be bothered to ring the bell on the DC gate".
That one alone probably resulted in our longest ever ticket.
The physical world sucks.
Also like I said: physically racking only makes sense if you are huge. Managed bare metal is a whole market category and it’s spectacularly cheaper than big cloud for most work loads. For bandwidth it’s like 1000X cheaper. That is not an exaggeration.
There are also many other alternatives. Example: VPS providers like Vultr which have expanded to offer more traditional "cloud" features like object storage, load balancers, managed DBs, etc. Their pricing is way more competitive than AWS, especially when you consider bandwidth.
There’s a sort of arguable sweet spot where someone motivated and knowledgeable can manage their own hardware, even if it’s just rented from Hetzner etc. But that just doesn’t scale.
Once you do try to scale that - not just the hardware but the staffing that’s needed to avoid a bus factor of 1, to ensure the required uptime especially if it needs to be 24x7, to handle disaster recovery, failover, security and compliance issues etc. etc., you quickly run into all the reasons that infrastructure management services and other computing services - i.e., cloud - have won out so definitively.
If you’re small enough that none of those things matter very much to you, and knowledgeable enough to run your whole system yourself, and have the time and inclination to deal with it, go for it! But such people are outliers who are really indulging a hobby more than anything else. It generally makes extremely little business sense.
That's not a narrow legal perspective, it's one look at a very obvious balance sheet. The same could go for hosting.
If you're racking up 750/hr putting big law on routine corporate tasks then you are probably messing up. Hire an admin.
The capex vs opex theatre is just stupid economics and bad generalization from wall street types.
Almost nothing of it is really real.
And your analogy may impress other glorified salesman, but it doesn't hold water for a second, electricity is fungible, computing is not, electricity is stateless, you computing infrastructure carries your data. Power consumption generally is not a competitive differentiator,computing often is. And of course, the economics IN THE FUCKING REAL WORLD is broken: It is very hard to compete with the prices of the grid, not so in the modern cloud world where hyperscalers captured market enough to feel free to start extracting monopolistic rent from their consumers. And even the premise is uninformed, heavy industry frequently resorts to co-generation, and now, ironically, even data centers projects are exploring it.
Seems like people missed the end of what I wrote though. We run some bare metal but do not physically handle it. There’s many companies who will rent huge boxes with good connectivity in a data center. DataPacket is the best we have found for price and reliability.
Physically racking only makes sense if you are huge or have special requirements.
CISA has identified 16 US industries where they have noted that companies should be able to operate indefinitely without internet access. See the Water Plant hack stories coming through right now across more than 19 states, for example. Water, electricity, internet access / telecom, military, chemical, logistics, transportation, etc.
Edit: my bad, read that as monthly instead of yearly. Still, a yearly spend of millions would still make sense to bring that in-house.
With bills of that magnitude, each time I do a little house cleaning and delete some old data, change storage classes, or discover some unused servers... the savings (that are barely a rounding error on their bill) could pay for a whole year of an engineer or a bunch of servers that could power a good chunk of their production traffic.
An in-house team is most likely competing with something like Dell or VMware, not really Oxide. A significant part of Oxide’s value proposition is that you’re buying hardware and software purpose built for each other. Unless you’re also going to go so far as to do all of that, which companies like Google do, of course, it’s not really the same thing.
This matters when your various vendors start pointing at each other when something goes wrong. Oxide is truly “one throat to choke” in a way others just aren’t, and stand by that quality.
(Not to mention other various efficiencies, like power, or removing things like the BIOS and BMC junk that’s in basically every other server you buy right now. And the ability to send attenuation from boot up through the host OS. Just tons of things they’re differentiated on that your in house team just isn’t going to do.)
For me, Oxide is one of the most interesting things I've seen in the computing market in a long time.
If you can roll around those possibilities in your head, you start to see how absolutely unique this is and why these extremely sensitive and important customers and industries want this.
Not one-time cost, but rather TCO.
You still have a fairly large up front cost ($600k base in 2023ish numbers, probably over $1M now?), and an ongoing support subscription.
They are filling a niche no one else is for a small pool of fish with virtually endless pockets.
VMware was a publicly traded company got more than a 20 year run where they dominated virtualization and captured over 80% of virtualized servers. That a publicly traded company sold out to another publicly traded company over and over after two decades where they got scraped for change in the couch cushions doesn't surprise me at all.
> (e.g. mainframes, defense) And yet mainframes are still in use, still getting purchased, and Defense is by far the largest segment seeing movement in the US right now. TONS of dollars, much of it going into AI, drones, etc. Much of which needs digital and infrastructure development and deployment for R&D and operations.
Right now is probably an amazing time for them sales / interest wise. A LOT of money going into software and hardware attestation right now.
The interesting part was the software, management interface, Terraform provider and how everything just fit together. Having storage, network and compute all in a single managed rack package brings a lot of value and brings down TCO. Really appreciated the security group like approach to network policies.
Unfortunately I haven't worked with HPE or Dell recently so I'm not sure what they currently offer.
Intel/Barefoot Tofino 2, VHDL/SystemVerilog, FPGA, QSFP28 (100GbE networking), P4 programming.
Their buyers don’t have customer stories. They don’t sell to SaaS companies.
> They don’t sell to SaaS companies.
Also, the OP did not say they are a SaaS company. They only said they spend 900K USD per year with AWS.
My understanding is the full rack is about $1.2M and smallest half rack is about $600k and this was before the RAM and other price hikes now.
You are still going to have some residual cloud workloads(so all AWS won’t migrate ) and HA and DR regions etc plus the maintenance and incidentals (power , connectivity ).
I don’t expect anyone less than 5M spends and high base loads is a good fit for their offering.
It is not once and done you have some continuous costs in either direction.
1. you will not be able to still move all your workloads only your base loads .
2. There will be residual workloads not only if they are spot/flexible bursts but also they are too deeply integrated to Paas offerings .
3. you have to pay for power cooling and network (and its backup) for 5 years .
4. Finally you also have pay for infra team to maintain, this is increasingly difficult (and expensive) to hire and retain .
Don’t get me wrong I would love to be able buy something like this, but the cost economy is pretty steep and 1-2M spends is too early (it is not on oxide, serious hardware costs a ton these days )
Selfishly of course so I can make sure there are more episodes of Oxide and Friends for years to come. Adam annd Bryan's ability to reference thirty year old simpsons episodes is unmatched.
It seems like Jane street and lawrence national laboratory are two confirmed customers.
It would be nice to know more about pricing so the Enthusiast Joe can have a better idea, but it's more a boutique vibe right now.
Just the thing for an ambitious enthusiast to upgrade to from their Raspberry Pi rack!
Tracing back through all the multitude of references to the $600k price, the earliest I found was from 2023, and it's completely unsourced: https://news.ycombinator.com/item?id=38498840
She was still listed as an advisor in some capacity, but she moved on to a different startup.
> In this episode, we sit down with Jessie Frazelle, CEO and co-founder of Zoo, a company working on innovative software and hardware technology. Jessie shares her fascinating journey, from getting her start at digital agencies to working at tech giants like Google and Microsoft and ultimately co-founding her own successful startup, Zoo.
* https://www.youtube.com/watch?v=9MkDJMiB_8U
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That's just not an acceptable modality of software for complex hardware industries. I'm not going to launch a half-decade long engineering project on a subscription software where I rent access to my own design files and logic. You can't access CAD on a plane, in flaky WiFi, or at a remote test facility or site. Until they let me just buy and run their software on my team's computers it's a non-starter.
right hand: nearly every employee of every org buying these things is sending almost everything to LLMs - or using software ULTIMATELY written by, tested by or whatevered by, these LLMs. LLMs that were created by or distilled from anthropic, openai, or google, who see everything SALIENT about what you do, or what ALL of your customers do, even if they are careful about not looking at the specifics of what you do
I'd love to give Bryan Cantrill or ahl a 30 min demo. Feel free to ping!
Man, they are just sucking up capital. If somebody like Antropic has made them the primary 'CPU' rack, then that's they kind of cash you need.
I mean, you could probably get multiple GIGAbytes of RAM with 445M.
I am still a huge fan and supporter of Oxide, and I'm really glad to see them still doing well.