Chip startup Astera Labs is targeting a valuation of up to $4.5 billion in an initial public offering, riding a wave of interest from investors for all things AI.

The Santa Clara, California-based company will offer nearly 14.8 million shares, while current stockholders will offer approximately 3 million shares, per its regulatory filing.

In total, the company aims to raise up to $534 million by selling shares priced between $27 and $30 each.

The target valuation would be an increase from the company’s last raise — a  $150 million Series D led by Fidelity Management and Research that valued the company at nearly $3.2 billion in late 2022. Other investors in Astera include Atreides Management, Intel Capital and Sutter Hill Ventures.

The company also raised a $50 million Series C — similarly led by Fidelity — that valued it at $950 million in September 2021.

AI and IPOs

Astera’s filing comes just as chip giant Nvidia seems poised to overtake Apple as the world’s second-most-valuable company. Demand for high-end chips has never been higher thanks to the current generative AI surge, which assuredly has something to do with Astera’s filing timing.

The startup provides data and memory connectivity solutions for some of the biggest chipmakers in the world, including Intel and Taiwan Semiconductor Manufacturing Corp. Its potential IPO would be a rare public-market exit for a chip startup.

Astera’s filing has been reported on for weeks and seems to lend more credence to the thought the IPO market could be thawing. Reddit started its pre-IPO roadshow this week, which followed public offerings last year from the likes of Arm Holdings and Instacart.

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Illustration: Dom Guzman