Pensando Systems Inc., a startup led by former Cisco Systems Inc. executives, exited stealth mode today with more than $200 million in funding and a custom chip that it promises will supercharge enterprises’ on-premise servers.

The startup has been in the limelight since long before the industry even knew what it’s working on. That partially stemmed from the reputation of its leadership, which includes Chief Executive Officer and former Cisco senior vice president Prem Jain, as well as three other veterans of the networking giant’s management team: Mario Mazzola, Luca Cafiero and Soni Jiandani. Their last startup was acquired by Cisco for $863 million.

Pensando has engineered a data center chip specifically optimized to handle computing tasks related to network management, security and data storage. The startup provides the chip as part of accelerator cards that can be plugged into a server to offload these tasks from the machine’s main processor. The result, according to Pensando is a 20% to 40% reduction in central processing unit utilization.

The freed-up processing cycles provide potentially major efficiency gains. Using the extra computing power, data center servers can handle bigger workloads than they otherwise could. Moreover, the fact that Pensando’s hardware takes over the heavy-lifting involved in network, security and storage management removes the need for the pricey standalone appliances companies often use for the task.

The startup has built a full suite of products around its chip technology. Pensando offers two accelerator cards, the Naples 100 and Naples 25, plus a system called Venice that allows administrators to centrally manage their deployments. 

The startup’s hardware is already running in the data centers of multiple Fortune 500 companies. One of these customers, Goldman Sachs Group Inc., is also an investor. Pensando secured $133 million in funding over two rounds and is now raising up to $145 million more as part of a third investment expected to value it at as much as $645 million. 

Pensando isn’t the only well-funded startup hoping to shake up the  data center market with a custom chip. Santa Clara, California-based Fungible Inc. recently nabbed $200 million for its data processing unit, which offloads processor-intensive networking tasks from server CPUs. The Fungible leadership has a similar background as the Pensando team: CEO Pradeep Sindhu was among Juniper Networks Inc.’s original founders. 

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