Due diligence

- Second take

By The Chilli staff analysts

Here's an update on three companies which The Chilli has carried out 'Due Diligence' on over the last year - Siroyan, Antenova and picoChip.

Siroyan - our analysis of this company in our launch issue in September 2002 identified several areas to be addressed if the company was to gain revenue traction and raise its next round. The company, alas, ceased operations in January 2003 as a result of changing its direction too slowly. Unconfirmed rumours suggest that the intellectual property was sold to the field-programmable gate array (fpga) vendor Altera. So where did Siroyan go wrong? The Chilli's view is:

• There was no platform solution specific to a market niche
• Custom application-specific integrated circuit (asic) projects were uneconomic and the market was flooded with too many 'me-too' processor/dsp core
• Customers required total solutions, not stand alone cores

Antenova - profiled in June 2003, The Chilli recommended that the antenna technology company work with partners in the chipset and module arena to develop complete solutions with a competitive bill of materials (bom) cost and access to tier one customers through partner channels. At the end of July, the company announced that it had partnered with Galtronics to use its manufacturing capability and extensive sales channels. This would allow Antenova to minimise cash burn and concentrate on its technology, while Galtronics would use its resources and customer relationships to design in the solutions. We believe Antenova needs to continue building its partnership network and create presence in more geographies.

picoChip - the Bath-based fabless semiconductor vendor recently closed a Chilli R2 round of $17m led by Pond and Atlas Ventures. The company still has a demanding challenge, if it takes the route of a straightforward baseband processor, facing incumbents players such as Texas Instruments and Analog Devices. It needs to consider the benefits of tackling the market with a more complete system solution as advocated by The Chilli. Big advantages and an easy adoption route are required for a basestation vendor to consider the risk/reward of using new technology from a startup for a critical project. Also, while the 3G basestation deployment has been slow, picoChip may want to consider other complementary markets, such as wireless metropolitan area networks (man), etc.

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© Chilli Publishing Ltd 2003

21OCT2003