InnoLight raises $38M to help servers communicate through fiber-optic cables

Google Capital, the growth-stage venture arm of Google, has just made its first investment in China.

The lucky company, InnoLight Technology, announced earlier today it has raised $38 million in a third round of funding.

InnoLight manufactures high-speed optical transceivers used by computer servers. They enable servers to communicate with each other through fiber-optic cables by transforming electrical signals into optical signals, and back to electrical signals.

“InnoLight’s technology is uniquely suited for next-generation data center environments,” said Google Capital general partner Gene Frantz in a statement.

Google’s investment in the company is a strategic one for both sides. Google operates one of the largest data facilities in the world, and more than half of InnoLight’s revenue comes from the U.S. market, including cloud operators and communications equipment manufacturers as some of its customers.

Google Capital co-led this round together with Lightspeed Ventures. The company will use the new funding to purchase new production equipment, grow its team, research and development, and other production-related needs.

Google Capital launched its fund last summer, and has now invested in nine companies.

InnoLight was founded in 2008 by Osa Mok, Hsing Kung, and Sheng Liu, and is based in Suzhou, China. The company previously raised $20 million in funding from Suzhou Ventures and Acorn Ventures, among others.