In the spring, we hit a pretty wild milestone: Oxide paid income tax. And not because of some unusual transaction or one-time event, but because our ordinary operations (selling computers!) generated taxable income after accounting for the costs of components, manufacturing, salaries, and running the rest of the business. Of course, we each individually pay income tax every year; is it that surprising that a company is doing what we all do every spring?
\nWell, yes, it is: most startups don’t pay income tax because most startups\naren’t profitable! Indeed, startups seek investment because they have costs\nlong before they have revenue, let alone gross profit — let alone income.\nThis is by design: profitability is a lagging indicator of product/market fit\n(the adventure in venture capital is investing long before the business has\nmaterialized!).
\nSo this was a big milestone, and on top of that (and contrary to\nRuss Hanneman’s admonition!), we\nhave a very large order backlog. On the one hand, it’s truly extraordinary\nto watch the business generate cash, but with demand far exceeding supply,\nsignificant cash is needed to secure inventory and fulfill these orders. This\nis one of the peculiar dynamics of a rapidly growing hardware business: we must\ncommit substantial cash to components and manufacturing well before the\nresulting systems reach customers.
\nNow, between our\nSeries B,\nSeries C, our existing debt\nfacilities, and the cash generated by the business itself, we felt confident we\ncould satisfy our current backlog, but the absolute numbers are large\nenough that we would have had to exercise real caution in accepting\nadditional demand.\nWe are, after all, children of the Dot Com bust — cautious by nature — and\nwould not put the business in a position where new supply disruptions, economic\nshocks, or other events outside our control could jeopardize it.
\nFortunately, this is the problem that capital is born to solve. Our investors saw this too: they have been extraordinary believers in Oxide from the beginning, and, thrilled by the burgeoning demand, they wanted to be sure that we were properly positioned to fully take advantage of Oxide’s large market.
\nAs they have so many times for us over the seven years of the company,\nEclipse stood up to lead, and our $445M Series\nD quickly came\ntogether. Existing investors USIT,\nRiot Ventures, and\nJane Street signed up for big pieces — and others on the cap table including\nFriends and Family Capital and\nCounterpart eagerly joined in.
\nWe are deeply appreciative of the support of these existing investors, but\nwe also wanted to\nadd new investors to the company. While there was a lot of outside interest\n(profitability being the ultimate VC aphrodisiac!), there was one firm that\nstood above the rest: Atreides Management, which\nfirst got to know us nearly two years ago and has stayed close to the company\never since. We love their analytical approach, their courage in hard-tech\ninvesting — and their belief in Oxide.
\nFinally, we are thrilled to welcome AMD as a new strategic investor. AMD has\nlong been a believer in Oxide: it was with their support that we were able to\nachieve breakthroughs like our own\nplatform enablement software. And of course, we have been big believers in\nAMD: one of our first big bets was\non AMD EPYC. We think the partnership between AMD and Oxide is a lasting\none, and it’s fitting to have that expressed in the cap table.
\nAll of these investors are — like us — in it for the long haul. When we\nraised our $200M Series C, we\nsaid that it was to entirely de-risk the company with respect to capital, to\nassure both our longevity and our independence. This Series D builds\non that assurance to allow us\nto satisfy our substantial backlog while continuing to accept new demand,\nexpand manufacturing capacity, and invest for the enduring company that\nwe have always set out to build.
\nTo our investors, partners, fans, long-time listeners, employees, and most of all customers: thank you.\nWhile this is but a milestone on the long road to what we know Oxide will be,\nit is nonetheless an exhilarating one!
","headings":[{"level":1,"text":"Our $445M Series D","id":"our-445m-series-d"}]}}