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Icera lands $40M Series C round

A British chip developer founded by veterans from Broadcom Corp. and STMicroelectronics NV has lured $40 million in venture capital financing, which the company says should suffice until it breaks even and eventually goes public.

The startup, Icera Inc., received the cash in a Series C round led by London-based Amadeus Capital Partners Ltd., home to one of Europe's most successful venture capitalists, Hermann Hauser, who will join the Icera board. The round also included previous investors Accel Partners of Palo Alto, Calif., Boston-based Atlas Venture and Menlo Park, Calif.-based Benchmark Capital.

"We've known the team for a while, and we feel that the technology breakthrough they have achieved connected with the market makes for a big opportunity," Andrea Traversone, a partner at Amadeus, said.

Amadeus has a long history in the communications hardware and software industries with investments in 35 companies, including Element 14 Inc., which Icera's current chief executive, Scott Boland, founded and presided over until sometime after it was acquired by Broadcom for $642 million in 2000.

Bristol-based Icera, which also has offices in France and Japan, has now raised $82.5 million since it was founded in 2002 by former executives of Broadcom, Element 14 and STMicroelectronics.

Icera took in its first cash in 2003, comprising $10 million from Benchmark and Atlas. Accel joined the investors in 2004 in a $22.5 million Series B round of funding. A $10 million add-on investment to the Series B round was completed in April.

Icera products are not on the market yet, but customers have been sampling them for the last six months, Boland said. He added that Icera won't get into full production until the middle of the year.

"We have some revenue streams from sampling," Boland said. "We expect to start getting production revenue around the third quarter."

The new funding will be used for engineering expansion as well as the addition of sales, customer and operational support.

The executives declined to give a valuation for Icera.

Icera makes one of two digital chips found in mobile telephones, the one that conducts the signal and communication processing (the other is an application processor that brings applications up on the screen). The company also makes chips for terminals that transmit data to mobile phones.

"We make the chip and deliver software that delivers algorithms," Boland said.

Most chipmakers use a combination of software and hardware accelerators in the chip, while Icera's technology uses only software, which, according to Boland, can allow for more efficiency in power usage and less cost. The name of Icera's chip is DXP, or deep execution processor.

Boland anticipates this to be the last round of funding for Icera, which should carry it until it breaks even at the end of 2007.

The investors tapped Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP for legal advice while Icera looked to Wilmer Cutler Pickering Hale and Dorr LLP.

Boland was clear as to the exit strategy for Icera. "It's very much planned for an IPO," he said.