Venture capital is losing patience with the fabless

Anne-Francoise Pele, EE Times
(09/09/2008 7:01 AM EDT)

PARIS — Just as Europe was starting to get the hang of entrepreneurial risk-taking with a handful of promising chip startups the prospects for exits through initial public offerings seem to have dried up. It is the IPOs that give the venture capital companies the big home runs.

A turning away from fabless has been confirmed by one transatlantic venture capital firm that said it plans to invest most of its funds in Internet companies rather than fabless chip companies. This raises questions as to how the next set of chip company startups will be funded.

Late in July, the partners of Partech International Inc. (San Francisco, Calif.) announced the buyout of Partech International Europe, the European arm of the venture capital firm. The buyout was done by the European managing partners Philippe Collombel and Jean-Marc Patouillaud.

Patouillaud, now managing partner, told EE Times that Partech's strategy is to invest mainly in Internet companies with only a minority of funds going towards electronics component companies. Partech's funds amount to $700 million and its European portfolio companies include DiBcom SA, Acco Semiconductor SA, Netsize SA, Alchimer SA, RealEyes3D SA and Dailymotion SA.

"Our goal line is quite clear," commented Patouillaud. "It is all and only about information technologies. Today, if I told you that we want to bet the majority of our capital on semiconductor component niches, you would probably be surprised."

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