Phanofi: Shaping the Future of Sustainable High-Speed Interconnects

The amount of data that goes in and out of a data center has reached astronomical heights. As a result, their electricity bills also have skyrocketed. 

One bottleneck accounting for up to 25% of data centers’ electricity consumption are interconnects: Cisco estimates that 70% of the global data traffic lies inside a data center. When servers communicate with each other, information needs to be converted from electronics to optics and vice versa, which consumes a lot of energy.

Phanofi develops high-speed interconnects for data centers that convert optical to electronic signals more efficiently, making data centers faster, greener, and more scalable. Founded by Hitesh Kumar Sahoo and Dagmawi Alemayehu Bekele in the fall of 2022, Phanofi received an ERC Proof of Concept Grant, funding from Spin-outs Denmark and Innovation Fund Denmark, and won the hardware pitch competition at the TechBBQ 2023 event.

Learn more about the future of sustainable high-speed interconnects from our interview with the co-founder and CEO, Hitesh Kumar Sahoo: 

Why Did You Start Phanofi?

Throughout my career, I’ve enjoyed working at the intersection of research and commercialization of technology. Research is fun on its own, but I feel like it’s not being completed until its results find their way into an application. That’s why I took entrepreneurship courses during my Ph.D. in photonics and geared my career decision toward founding a startup that would take research out of the lab and into the real world. 

My now co-founder Dagmawi and I met when we jointly organized a student photonics conference at the Technical University of Denmark (DTU) as part of the Optical Society of America (OSA). So we worked together before and put together a great team of volunteers when we organized the conference for the first time in the Nordics. Afterward, Dagmawi approached me with the idea of founding a startup to commercialize his research around data center interconnects, and together, we founded Phanofi in the fall of 2022. 

How Does Your Interconnect Technology Work?

Just about anything you do on your phone or web browser needs to access data in a data center, which means a lot of data is being sent back and forth—and converted from optical signals traveling through fiber to the data center to electronic signals, zeros and ones, that are processed by microchips within the data center. 

Interconnects convert optical to electronic signals back and forth, but they consume a lot of energy in doing so: estimates go as far as claiming that they consume 20 to 25% of data centers’ electricity. We develop more efficient interconnects, which use less energy and are thus greener. 

Light is fundamentally an electromagnetic wave characterized by three properties: its amplitude, phase, and polarization. Our interconnects use all three dimensions for transmitting information. Intuitively speaking, you can switch an electromagnetic wave on and off to encode ones and zeros, but that uses just its amplitude information. One can also send information by moving the wave back and forth, i.e., in its phase or in its horizontal or vertical polarization.  

Our technology allows us to convert phase to amplitude information. We do this using a passive photonic circuit, which takes in the phase of an electromagnetic wave (typically hard to detect!) and obtains an intensity signal (much easier to detect!). We have demonstrated this using one laser to check how fast our interconnects can be—in the future, we’ll be able to add multiple lasers to match the required bandwidth. 

How Did You Evaluate Your Startup Idea?

We believe the future of computing and communication will be a mix of electronics and photonics. That’s why we’re building an interconnect platform technology—a high-speed link between the two worlds. We’re currently mapping the requirements of different industries, but our main focus is on data centers and high-performance computing, as they have the largest pain, and the industry is huge. 

Efficient Interconnects will also play a big role in enabling bigger AI models. Operating AI models is resource-intensive, and one part is the communication between the nodes or servers. Low latency and low power consumption are essential to build large AI clusters, so we are developing our product with a strong focus on these requirements.

We think the path to commercialization is ideally through close partnerships with industry. Co-developing with the industry helps us gain credibility, so we are working toward a demonstration of our photonic chip solution with industry partners in the near future. 

What Advice Would You Give Fellow Deep Tech Founders?

First, finding a co-founder who complements your skill set is like winning a golden ticket. I can’t stress this enough—even if you don’t have a startup idea but a person whom you want to work with, stay close with, and bounce ideas off each other, finding the right person is crucial. 

Second, fundraising is tough, especially coming out of 2023. Fortunately, we got a decent amount of soft funding, which got us going. Talk to people who have fundraised recently for advice and put a process in place to reach out to investors in a structured way. It can be like a full-time job, and you want to align different fundraising conversions so that, in the end, you’ll ideally get term sheets from multiple investors and not just one.

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