Economic downturns sometimes force competitors to join forces, and ultrawideband chipmakers Staccato Communications Inc. and Artimi Inc. have agreed to merge rather than go it alone. The companies' venture investors have ponied up $20 million in new funding on top of the roughly $120 million already invested in prior rounds, giving the newly merged company a chance to survive amid
struggles and
consolidation elsewhere in the UWB sector. Participating in the funding are Allegis
Capital, Amadeus Capital Partners, Bay Partners, Charles River Ventures,
Formative Ventures, Intel Capital, Interwest Partners, Khosla Ventures,
Noble Venture Finance, Oak Investment Partners and Vision Capital.
Staccato vice president of marketing Jeff Chang says Staccato was running out of money, with enough capital to last only through year's end, when its VCs implored it to "get creative with ways to get through the downturn." That led it to unite with Artimi in a deal Chang characterized as a merger of equals, with no money changing hands. Some redundant positions were eliminated, Chang said, although at 85 employees the merged company is larger than Staccato's prior headcount of around 70. Artimi's multi-chip systems and software approach complements Staccato's expertise in single-chip silicon, according to Chang. The two competed somewhat indirectly in terms of sales accounts, he says.
Artimi last announced funding in March 2007, when Khosla Ventures topped off its $31.5 million Series B round following a prior closing that included Accel Partners, Amadeus Capital Partners, Index Ventures, Oak Investment Partners, and Bank of Scotland Growth Equity. Staccato raised roughly $75 million total, including a $17.5 million fourth round from Allegis Capital, Bay Partners, Charles River Ventures, Formative Ventures, Interwest Partners and Vision Capital in October 2007.
Nearly all of the two companies' prior investors joined in the new $20 million round, although Accel and Index are somewhat conspicuously absent. Chang declined to comment on the financial terms of the current deal, and could not say whether they received any liquidity in the new round.
-- Paul BonanosSee Nov. 20 press release from Staccato
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