Despite a two-year losing steak that caused Intel Corp. to shave $841 million off its balance sheet, Intel Capital will not scale back its investment pace and expects to spend $200 million financing private companies in 2003.
Intel Capital wrote down $372 million off the value of its $1.1 billion investment portfolio last year, following a $469 million write-down in 2001. And its write-downs are expected to continue indefinitely, says Intel Chief Financial Officer Andy Bryant
“There’s still enough value left on the books to see sizable numbers [of write-downs] over the next quarters if we continue in an environment where financing is scarce, where companies have difficulties reaching breakthroughs and companies are having difficulties gaining customers,” he told investors and analysts on a conference call last week.
Although Intel is not the only corporate investor to be dogged by write-downs – JPMorgan Partners, for example, took a $1.2 billion write-down in 2001 and continues to bleed red ink – it is a bellwether for early-stage technology investors because its portfolio is so large and so diversified.
It did not report the names of the companies it had to write down, but the firm is an investor in sectors that have been hit hard by the technology downturn, including Internet infrastructure and services and consumer wireless deals. The firm has shifted its investment focus in recent months, and plans to keep its place atop the list of most active venture capitalists.
Last year Intel Capital spent about $200 million investing in 100 portfolio companies. Two-thirds of those were follow-on investments, while the remainder was new deals. The firm expects to spend about the same in the coming year, but spend the bulk of that on new portfolio companies, says Intel Capital spokeswoman Laura Anderson.
The firm announced a $150 million push into WiFi in October, and also plans to bulk ups its portfolio with digital home computing technologies, server technologies and in modular computing. It recently closed its first nanotechnology deal, and will continue to fund companies developing sensors, MEMS sensors, semiconductors and fuel cells.
Contact Carolina Braunschweig