Everything that goes up will eventually come back down, whether it?s a ball you toss up in the air or the Nasdaq busting through the 5000-point mark only to come crashing down months later, losing half of its value on the descent.
The semiconductor industry is also adhering to the law of gravity ? both in the public and private markets. Closing out 2000, companies in the semiconductor space rounded up more than $7 billion in venture capital disbursements, a staggering increase of nearly 198% over the previous year?s total of $2.36 billion. After taking a look at first quarter activity, it would appear another banner year is not in the cards.
According to preliminary data from our VentureXpert database, venture firms disbursed about $147.7 million to 11 companies in the semiconductor industry over the first three months of this year. This marks a drop-off of more than 100% compared with the same time period last year, when 26 companies received about $309.6 million in venture funding. Even more staggering, first quarter disbursements in the semiconductor space are off by nearly 235% from the fourth quarter of 2000, when 31 companies garnered $580.6 million.
Despite the first quarter slowdown, the average investment is slightly larger than last year?s comparable period. Companies that received funding in Q1 2001 averaged about $13.4 million compared with an average of $11.9 million last year
Among those companies able to weather the slowdown and raise venture capital during the first quarter was a California-based trio ? Peregrine Semiconductor Corp., Rapid Stream Inc. and NetLogic Microsystems Inc.
In January, Peregrine Semiconductor raised a $37.5 million series G preferred financing round, which was led by Morganthaler Ventures, and included CDIB Ventures, Global Alliance Venture Capital, Intel Capital, Patricof & Co., Wasserstein Adelson Ventures, Roser Ventures and CSK Venture Capital.
Later that month, RapidStream raised a $25 million series C funding round. The round was led by Baring Private Equity Partners Asia, and also included Cabletron, InveStar Capital, Acorn Venture, Technology Associates and Star Capital.
Rounding out the top tree was NetLogic Microsystems, which secured $18 million in its second round of funding led by Sevin Rosen Funds. Other investors included J.W. Seligman & Co., Hambrecht & Quist, UMC Foundry, Hallador Ventures and GlobalLink One Capital.
Contact Jennifer Strauss..