On ne change pas une equipe qui gagne.
You don’t change a winning team. That’s why Graham O’Keeffe, a senior principal with Atlas Venture’s London office, and Parisian-based entrepreneur Alain Fanet have crossed the Eurotunnel to work together again.
They hope to repeat the success they experienced with T.sqware, a producer of DSL physical layer solutions and integrated communications processors and software. T.sqware, O’Keeffe and Fanet’s first effort together, was acquired for $200 million by GlobeSpan in 2000.
Trying to relive old times, O’Keeffe has invested in Fanet’s newest company, Arteris, which plans to design a new kind of system on a chip (SoC). The chip is expected to solve emerging problems in chip design caused by the increased number of transistors on each chip.
Four VCs poured $12 million into Arteris’ Series A round. The deal, led by Atlas’s London office, included Munich-based TVM Techno Venture Management, Palto Alto, Calif.-based Crescendo Ventures, and Paris-based Ventech. All four VCs were given a seat on the company’s board as result of the round.
The Paris-based company expects the capital from this round to last until the end of 2005, at which point the company would consider heading back to the private equity markets for another round, says O’Keeffe, senior principal with Atlas. When it raises its Series B round, Arteris hopes to lure in an Asian investor to make certain it has worldwide market coverage.
“As VCs, we will use our networks to introduce Arteris to potential clients,” says O’Keeffe. “In a market as complex as the chip market, a company needs this kind of help to succeed.”
Fanet says that the economics of SoC is easy to understand. “Earlier technology produced very specific chips at a high cost, so a company needed high revenue to justify producing it,” he says. “With SoC, the scope of applicability is much greater, so a chip becomes a sensible investment at a much lower level of revenue.”
Arteris’ potential clients include automakers, aircraft companies and telecommunication equipment manufacturers.
Although they remain vague on the subject, investors expect the company, which was founded in early 2003, to have a finished product soon. “This is what made Arteris so appealing to us,” says Etienne Colas, a partner at Ventech. “You have a group of 15 people who have worked together for years, so the company starts working on the product from the get-go.
“Even in difficult times, there is always money for companies such as Arteris that have a good project with a good team to realize it.”