When Barcelona Design Inc. CEO and Co-Founder Mar Hershenson spearheaded a cutting-edge research project at Stanford University three years ago, she never dreamed it would become a full-fledged business. But it did.
Barcelona, which automates analog circuit designs for semiconductor chips, is now 25 employees strong and growing at a rapid pace. In fact, Hershenson lamented in a recent interview with Private Equity Week that the scarcity of analog chip designers ? less than 5,000 of which exist in the world today ? means she can?t hire fast enough because she has a vastly limited pool of talent to choose from.
What is more, the Sunnyvale, Calif.-based company has raised more than $60 million worth of venture capital to date, $11 million of which came in just this month. Led by Sand Hill Road-based VC Sequoia Capital, the second round transaction also included Series A backers Crosslink Capital and former Cadence Design Systems CEO Joe Costello, who now chairs Barcelona?s board of directors.
A veteran semiconductor investor, Sequoia first heard about the deal through Crosslink Partner Mark Stark, who also sits on Barcelona?s board.
“We?ve been very aware of the difficulty design teams have in designing SoC ? system on a chip technology,” said Pierre Lamond, a partner with Sequoia and Barcelona?s newest board member. “Linear circuitry is still an art at this stage, as opposed to a science, but Barcelona?s product simplifies and speeds up the process of the development of SoCs. The opportunities for the company are great because there is a clear return on investment situation there.”
Indeed, Hershenson said Barcelona?s technology makes it possible for designers to create analog circuits in a just a few seconds. With the technology that most designers use today, the same process takes at least a few weeks. What is more, research from Connors Communications and Dataquest indicates that the entire SoC market is currently worth some $11 billion.
The company?s technology is particularly relevant now with the advent of increasingly advanced wireless communications devices and PDAs, which use analog circuitry to communicate with what Hershenson calls “the real world.” Its offerings are of specific value to large-scale consumer electronics, semiconductor and communications companies looking to integrate additional functionality onto a tiny computer chip.
To that end, the company plans to focus primarily on Japan?s thriving consumer electronics industry, as well as similar markets in the U.S. and Europe.
Because the complex nature of designing such analog chips is such a widespread problem in today?s semiconductor marketplace, Barcelona?s solution seemed to strike a chord with most of the VCs she talked to, Hershenson said.
“A lot of VCs have companies in their portfolios that need to put out analog chips and can?t get it done,” she said.
Barcelona?s primary competitors include small design houses that act mostly as consultants and create chips by hand according to very distinct specifications. The company plans to overhaul that process to produce chips faster and in very short order.
Although she doesn?t expect the company to be profitable until early 2003, Hershenson said she doesn?t anticipate needing to take another dip in the private equity pool for at least the next year and a half. In the meantime, she plans to ramp up her sales and engineering staffs, and switch Barcelona?s gears into full production mode.
Contact Robyn Kurdek: Robyn.Kurdek@tfn.com
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