Lucidean Raises $18M in Seed Funding for Next-Gen Coherent Optical Links for AI Data Centers
December 26, 2025
The relentless growth of artificial intelligence workloads is placing unprecedented demands on data center infrastructure, with the need for faster, more efficient, and cost-effective interconnects emerging as a critical bottleneck. Optical interconnect startup Lucidean has announced a significant funding round to commercialize its solution aimed at this very challenge.
Based in Santa Barbara, Lucidean announced it has raised $18 million in a Seed financing round co-led by Entrada Ventures and Koch Disruptive Technologies (KDT). The investment syndicate also included Foothill Ventures, M Ventures, Cerberus Ventures, and Raptor Group. Concurrently, the company appointed photonics industry veteran Dr. James Raring as its new Chief Executive Officer. The capital infusion is earmarked to expand research and development, validate performance, and accelerate the productization of Lucidean's proprietary CohZero™ optical interconnect platform.
The core issue Lucidean addresses is a fundamental trade-off in current data center optics. Operators must choose between simple, low-cost intensity-modulation direct-detection (IMDD) links, which are limited to short distances, and high-performance coherent optical systems, which are complex, expensive, and power-hungry. Lucidean's CohZero™ architecture is engineered to break this compromise. The company claims its technology delivers the superior link budget and resilience to fiber impairments characteristic of coherent systems, but operates within the cost, power, and simplicity envelopes of existing IMDD ecosystems. This includes compatibility with widely deployed IMDD-class lasers and standard pluggable module architectures.
Dr. Alexander Fang, Managing Partner at lead investor Entrada Ventures, highlighted the technology's potential. “Lucidean is addressing a critical gap in the optical-interconnect market where existing IMDD and coherent solutions will both fall short,” he said. “With CohZero™, the company delivers coherent-class performance within the simplicity and power envelope of IMDD.”
The funding arrives as AI and machine learning networks push toward multi-terabit interconnect requirements. Dr. James Raring, Lucidean's new CEO, stated, “AI networks are outgrowing legacy optical approaches. CohZero™ delivers coherent-class optical links with zero overhead.” He added that the funding positions the company to accelerate hiring and demonstrate its value proposition in hardware. Dr. Raring, a seasoned entrepreneur with over 300 patents, previously co-founded and led Kyocera SLD Laser.
The industry implications are substantial. By promising coherent performance without the overhead of traditional systems, Lucidean's technology could provide hyperscale data center operators a smoother, more economical path to scaling network capacity. Isaac Sigron, Managing Director at KDT Israel, noted, “CohZero™ offers a clear path to ultra-high-capacity interconnects at AI scale. Lucidean is exceptionally well-positioned to redefine optical performance for modern data centers.” The company will now focus on turning its laboratory innovation into a market-ready product for the demanding AI infrastructure landscape.
Source: theaiinsider
