Fabless funding up for second successive quarter

Fabless funding up for second successive quarter
By Peter Clarke, Semiconductor Business News
April 9, 2003 (11:08 a.m. EST)
URL: http://www.eetimes.com/story/OEG20030409S0024

SAN JOSE, Calif. ѿ Funding of fabless semiconductor companies in the first quarter of 2003 grew 23 percent to $423.4 million from the $344 million raised in the fourth quarter of 2002, according to the Fabless Semiconductor Association (FSA).

In the most recent quarter 35 fabless companies raised $423.4 million in the quarter, the largest total raised since the second quarter of 2002 when fabless companies closed $429.5 million in funding, according to the FSA's "Fabless Fundings Report." In addition, the fundings closed in the first quarter of 2003 represented the highest number of deals closed since the fourth quarter of 2001.

The sums raised compares with the $511.4 million raised in the same quarter a year before (see January 28 story).

"The venture capital community is continuing to invest in the fabless space, albeit at lower levels than the past three years," said Mark Stevens, a partner at Sequoia Capital and a member of the FSA VC Advisory Board. "Companies that are developing and marketing devices for existing standards and have high-volume prospects are favored in the current climate."

In March alone 16 fabless companies closed $182.2 million of funding representing 43 percent of the funding raised in the quarter, the FSA said, suggesting that momentum building,

Investors also demonstrated a renewed interest in first-round funding during the quarter. In the quarter 29 percent of all funding went to companies seeking their first round, however, the average amount raised in first-round deals continued to drop, reaching $5.1 million, compared to an average of $8.3 million in 2002, $8.8 million in 2001 and $15.8 million in 2000, the FSA said.