Icera Semiconductor, the nine year-old Bristol soft modem company, has been sold to Nvidia for $367m – returning a $100m profit to its VC backers who have put up $250m in equity plus $12m in debt funding raised from Silicon Valley Bank in January.
Icera had always said it was intending to become a major independent player. For many years it talked about a $1bn IPO. The sale to Nvidia will be seen as a failure of expectations.
It is thought that VCs would have pulled the plug on Icera some time ago, were it not for the sheer scale of the investment in the company. This way they will get their money back at least.
Icera went for the baseband chip market but failed to win a design in a mobile phone handset – having to rely on low value sales to dongle manufacturers for revenues.
After Icera was founded, the wireless chip-set market transformed from a component business into a sub-system business with suppliers having to provide a complete module including RF.
This made the business extremely expensive for all but the largest participants.
Commenting on the acquisiiton, Malcolm Penn, CEO of Future Horizons, said: “In the current set of circumstances it’s not a bad deal. If I was a shareholder I’d have been happy to have had a profit. For Nvidia it’s a way to get themselves into iPad-type products.”