Phononic raises a cool $40 million to make quiet, spacious refrigerators

Refrigeration and air conditioning used to require vapor compressors, chemicals like Freon, fans, water chillers or passive heat sinks. But a North Carolina company called Phononic has developed solid-state refrigeration technology instead.

Phononic, which employs about 110 full-time today, just raised an additional $40 million in equity funding to rapidly expand manufacturing of its semiconductors and refrigerators, as well as sales and marketing efforts in the U.S. and China.

CEO and founder Tony Atti, a former research scientist with the NASA Jet Propulsion Laboratory, said:

“We want to push the limits of how small, thin and high heat pump-able our devices can be, which would benefit almost any hardware or industry you can think of from autonomous vehicles and EV batteries, to air conditioning and commercial refrigeration.”

The company began selling its first products, including quiet, vibration-free refrigerators, to the pharmacy, healthcare and life sciences industry. It has more recently expanded to telecommunications media technology.

Its chips are now used in the fiber lines that bring cable, voice or internet services to the home and office. Specifically, Phononic semiconductors cools photonic nodes that generate and transmit data across these lines.

Atti explained, “The main impediment you fight when you’re trying to maintain a 100 gigabyte data rate is heat.”

Besides hiring in sales, marketing and client support, Phononic plans to use its new funding for manufacturing, research and product development.

Atti claims that Phononic’s technology can already make 30 percent more storage capacity available in a refrigerator to store more inventory versus traditional systems, one reason hospitals and laboratories like units powered by Phononic.

He also said Phononic-enabled refrigerators are silent, don’t vibrate or rattle, consume less energy, and require less maintenance than traditional models. That’s all thanks to fewer moving parts and the absence of liquid, which erodes those parts, Atti explained.

Phononic is poised to build refrigerators and refrigerated kiosks for use in commercial kitchens, cafeterias and restaurants, next.

It’s notable that the company was able to raise such a significant amount of funding in the run up to an election. Including the $40 million extension, its Series E round amounts to $71 million.

GGV’s Jenny Lee, who sits on the board of directors at Phononic, said:

“Core technology disruption is a multi-year occurrence. Investors in this sector take a long-term approach to investments and are less affected by political climate. For Phononic, what was most important was that the technology works. They have working products which are already being adopted in the market, i.e. market validation.”

Investors in the extension round included UBS’ wealth management businesses, GGV Capital, Lookout Capital, Eastwood Capital Corp, Venrock, Oak Investment Partners, Tsing Capital, Huaneng Invesco WLRoss, Wellcome Trust and Rex Healthcare Ventures, according to a company statement.


Correction: Phononic’s latest round of funding was classified as Series E. An earlier version of this story called it a Series C round.