Fabless chip maker Altair Semiconductor Ltd. has raised $22 million in its third financing round led by Japanese venture capital fund Pacific Technology Fund, just four months after signing a major deal in Japan to supply chipsets for wireless devices operating on 4G technology. The company's existing investors also participated in the round.
Altair raised $26 million in its two previous financing rounds, the second of which was held in May 2007, in which it raised $18 million from Bessemer Venture Partners, BRM Capital, Giza Venture Capital, and Jerusalem Venture Partners. The Japanese fund that has just joined the company's investors specializes in buyout and growth capital investments in established technology companies focused on the Japanese market.
Altair, which was founded in 2005, is headquartered in Hod Hasharon and employs more than 100 people. The company develops mobile semiconductor chips for wireless broadband communications, specifically WiMAX technology. The company was founded by three former Texas Instruments Inc. (NYSE: TXN) executives - CEO Oded Melamed, CTO Yigal Bitran, and VP marketing and business development Eran Eshed. The three joined Texas Instruments after it acquired Libit Signal Processing in 1999 for $360 million.
Four months ago, and as first reported by "Globes", Altair signed an agreement with Japan's fourth largest mobile company Willcom Inc. The agreement, worth tens of millions of dollars was one of the largest ever chipset deals ever made by an Israeli start-up. Willcom is one of two telecommunications providers in Japan that have been granted a license to operate a 4G network, and Altair will provide it with chipsets for mobile handsets and other multimedia devices, such as media player and GPS devices. Willcom intends to begin the roll-out of the new service in 2009 and invest $2 billion (200 million yen) in the development of the service through 2015.
Altair is developing chipsets for both WiMAX and the rival LTE technology and is collaborating on the development of these sets with another semiconductor developer Wintegra Inc. following an agreement between the two announced earlier this year.
Next week will see the opening in Chicago of the largest annual event in the WiMAX industry, the WiMAX World Conference. Among those attending the event will be Nortel Networks (NYSE; TSX: NT), Cisco Systems Inc. (Nasdaq: CSCO), and Intel Corporation (Nasdaq: INTC). A number of Israeli companies will also be attending, including WiMAX systems company Alvarion (Nasdaq: ALVR; TASE: ALVR), and Runcom Technologies Ltd., which is developing Orthogonal Frequency Division Multiple Access (OFDMA) technology.
Altair will also be presenting at the conference, and it is one of the candidates for the Best of WiMAX World USA award, thanks to its AL2150 chipset, which is described on the WiMAX World site as the "smallest, lowest power CPE WiMAX Wave-2 available, and allows the coexistence of WiMAX with Blue Tooth and WiFi. Also competing for the same award is wireless backhaul solutions company Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT).
Data published by Altair reveals that the chipset it has developed consumes one fifth of the power used by an ordinary chip half the size and with similar functions. Following the completion of its second financing round in June 2007, CEO Melamed told "Globes", "Our focus is clear. We're not focusing on laptops or network connection devices, but handheld devices or multimedia handsets. This is because the market there is more interesting and more challenging technologically. It is also a market where we can also show the best we have, and what's more, it has a problem with power consumption for which we have a solution."
Published by Globes [online], Israel business news - www.globes-online.com - on September 23, 2008
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