XoomsysXoomsys Inc., a Santa Clara, Calif.-based provider of electronic design automation (EDA) solutions for the chip industry, is expected to announce today that it has raised $7.1 million in Series A funding. The company was seeded with $550,000 from angel investors as part of its July launch, and closed on the institutional round late last month.
“We got the exact amount we were looking for,” says Anjaneya Thakar, president of Xoomsys and former executive with EDA giant Synopsys Inc. (Nasdaq: SNPS). “We believed that the seed round would last us for four or five months – and that it would take us that long to raise venture capital – but it only took one month.”
Xoomsys pitched the deal to just a select handful of VC firms, with Benchmark Capital signing up first. Morgenthaler Ventures piggy-backed on the Benchmark term sheet, and was joined by individual investors Bill Davidow, founding partner of Mohr, Davidow Ventures, and Naren Gupta, former CEO of Integrated Systems Inc. (Nasdaq: INTS) and current vice chairman of Wind River Systems Inc. (Nasdaq: WIND).
Alex Balkanski of Benchmark, and Bob Pavey of Morgenthaler, joined the Xoomsys board, while Drew Lanza of Morgenthaler takes a board observer role.
“The EDA industry goes in waves,” Pavey says, in reference to a recent increase in VC interest in the sector (See PE Week, 8/9/04). “You now have [designs] at 90 [nanometers] and heading to 60 [nanometers]. It has changed the rules in terms of how products are built, which is why new companies like Xoomsys are needed.”
Xoomsys targets what Thakar refers to as the “holy grail” of semiconductor design: increasing the capacity of circuit simulation without losing accuracy. The company isn’t sharing details, but already claims to have proven its formula in computer simulations to prospective clients. The new capital will be for R&D and subsequent product manufacturing in 2005.
Thakar says that the company did not give any serious thought to remaining in stealth mode, due to its confidence that no other company – neither legacy nor startup – has solved the increased capacity problem.
Xoomsys is not currently planning to raise an additional round of VC funding.
In related news, Pavey noted that Morgenthaler is an investor in under-the-radar lithography company Brion Technologies Inc. Santa Clara, Calif.-based Brion has quietly raised more than $27 million in VC funding from Morgenthaler, Mohr Davidow Ventures, U.S. Venture Partners, WK Technology Fund, JPMorgan Partners and others.