Chip startups are rare these days. But Samplify Systems has managed to raise another round of $11.2 million in funding for its analog chip design business.

The company focuses on analog chips that can make the processing of real world data such as sound more efficient and thereby less costly. If Samplify’s technology catches on, it could sweep through a lot of electronics devices and make them cheaper.

Venture capitalists and entrepreneurs have stayed away from chip startups because they’ve become very capital-intensive, with a few chip companies raising more than $100 million. But Santa Clara, Calif.-based Samplify can get by with a smaller amount of money and a smaller team by focusing on one sector of the analogy chip business that requires a lot of engineering expertise but not a lot of bodies.

Investors include Integrated Device Technology, Charles River Ventures, Formative Ventures, and Schlumberger. Woodside Capital Partners acted as an advisor.

Samplify creates chips that convert analog data to digital data. In other words, they convert things like sound into the ones and zeroes of digital computerese. These chips are necessary for everything from baby ultrasound pictures to wireless communications infrastructure. They’re also being used in industrial and defense markets.

Normally, analog chips just convert data and pass it along. But Samplify’s chips can convert data and then compress it too. This may result in cheaper and more accurate products for consumers. This kind of task requires expertise in “mixed signal” technology, or the combination of analog and digital functions on the same chip.

The analog chip market is normally dominated by big chip companies such as Texas Instruments, National Semiconductor, Maxim Integrated Products, Linear Technology, and Analog Devices. But Samplify figured out how to make the chips better in a way that takes a lot of cost out of a system.

Typically, analog chips are built in old, depreciated chip factories that use old chip-making processes (such as 0.35 micron or 0.25 micron features, a measurement of the width between circuits). Those older plants are fine for analog circuits and they’re really cheap. But it doesn’t pay to put digital circuitry on the same chip, because the process for the digital circuitry is really inefficient.

Consequently, many data converter chips have a lot of analog and just a little bit of digital circuitry on them. Or they simply do the analog processing and then pass the data on to a second chip (dubbed a field programmable gate array) that handles the digital compression. The problem is that moving data in uncompressed form is far more inefficient than moving it around in compressed digital form. The transmission side and the receiving side need sophisticated circuitry that can handle a lot of analog data movement. That’s costly.

Tom Sparkman (pictured), chief executive of Samplify, said in the past that the company has figured out a way to put a lot of digital circuitry together in the same chip as analog circuitry with its Prism IQ signal compression technology.

A system that once needed the ability to send 200 gigabits of data throughout the system each second might now get by with just 60 gigabits a second. An example is a wireless antenna in a train station or an airport. It often requires a fiber optic cable to move data in analog form. That expensive infrastructure could be eliminated if the data were moved in digital form.

By doing this, Samplify can dramatically reduce the costs of electronic gadgetry. The company is focused on markets where this kind of solution matters a lot, such as chips for ultrasound machines or cat-scan machines. The chips can also be used in cell phone infrastructure, military equipment, test equipment, and data acquisition equipment.

The technology was dreamed up by Al Wegener, chief technology officer of Samplify. Wegener started working on the technology in 1999. His bosses at Texas Instruments didn’t want the technology, so he got permission to take it to a startup. He received initial funding from Charles River Ventures in the fall of 2006. The company raised a second round in March 2007. Besides Charles River Ventures, Formative Ventures and angels also invested. With the new round, Samplify has raised $22.5 million.

At first, the company sought to license its technology to others. It has been showing the technology to potential customers or chip makers in the past year. But there is more money in making chips. So the company is now designing its own chips, which will be fabricated by a contract chip manufacturer, Taiwan’s United Microelectronics. Sparkman said earlier that the company was able to get its first sample chip done on a budget of $5.6 million.

In 2009, Samplify introduced its SAM1600 family of analog-to-digital converter chips. It also introduced its AutoFocus “beamforming” technology for the ultrasound market. Taiwan’s UMC contractor chip manufacturer fabricates the chip for Samplify. Samplify says it has more than 30 customers in medical imaging and wireless infrastructure. The company will use the proceeds from the new round to bolster its customer service and accelerate its expansion into new markets.

Tags: analog chips

Companies: Samplify

People: Tom Sparkman

Article courtesy of VentureBeat » deals

Craig Ellis with Caris & Co. offers some bullish words regarding the semiconductor supply chain: days of inventory in the supply chain are at the third lowest level in 14 years, he writes, and “chip inventory dollars as a percent of forward two-quarter hardware saels are 10% below the long term trend and are at 2004 to 2008 lows.”

To benefit from that, Ellis recommends buying Intel (INTC), Microchip Technology (MCHP), and Analog Devices (ADI), as somewhat defensive picks.

The other issue to consider, he writes, is the recent run-up in fuel prices with the Mid-East crisis,

Past work showing a $40 per barrel change in oil impacting annual global GDP growth by ~100 bps suggests a 13% increase in West Texas Intermediate Crude to $97 per barrel from pre-crisis levels – if sustained, could shave 25 bps off expected calendar ’11 global GDP growth, and thus, ~80 bps off the Street’s 10.2% year-over-year chip sector revenue growth, a risk to our SOX 550 call.

He also, however, expects Semtech (SMTC) to see better-than-expected results for the current quarter thanks to a boost from shipments of parts into smartphones and tablets. Ellis rates SMTC stock Average.

He thinks National Semi (NSM) will report an in-line quarter based on a “waning cyclical inventory de-stocking” and relatively steady sales into industrial products. But investors “will need sustained evidence of better relative revenue growth to continue putting new money to work,” he thinks. Ellis gives NSM stock an Average rating as well.

Lastly, Marvell Technology Group (MRVL) which he rates Above Average, should report this quarter in line with the Street at 42 cents per share in earnings. The stock is up only 2% this year, versus a 13% rise for the Philadelphia Semiconductor Index, but Ellis advises patience. A big swing factor is the price it may get for its application processors for tablets, he writes. The company’s “Armada 628” chip is “one of the slickest architectures in our 10-company, 31-product comparative analysis,” writes Ellis, although “design-wins non-existent on our checks and Nvidia’s (NVDA) quad-core “Kal-El” potentially leapfrogging” that part by the third quarter of this year.

For a different perspective on Marvell, specifically, the dangers in a weakening PC market and a weakening disk drive market, see comments today by Craig Berger with FBR Capital.

Article courtesy of Tech Trader Daily

Today’s funding announcements include tools to help businesses oversee social media and spending:

Sprout Social brings in $10M to consolidate a business’ social presence: The Chicago-based startup has raised a second round of funding led by New Enterprise Associates to help small and local businesses manage customer relationships on sites like Facebook, Twitter and LinkedIn through a single online dashboard. Founded in 2009, the company last raised funding from Lightbank, the investment firm led by Groupon co-founders Eric Lefkofsky and Brad Keywell.

Coupa Software gets $12M to help companies manage spending: The developer of cloud spend management software has raised a fourth round of funding led by Mohr Davidow Ventures, according to a filing with the SEC. Based in San Mateo, Calif., the company helps more than 150 customers, including salesforce.com and Amazon, keep track of purchases and potentially cut costs through its web-based tool.

WhiteGlove raises $12.5M to bring doctors to you: The Austin-based company has raised a new round of funding led by Enhanced Equity Fund for its medical care service, peHUB reports. Founded by a software entrepreneur, the company, which brings doctors directly to patients at home or work, started in Texas and plans to use the funding to focus on national expansion.

Stanford spinout C3Nano raises $3.2M: The Hayward-based startup has raised a first round of funding from GSR Ventures to develop transparent electrode material to be used in touch screens, smart windows and flexible displays. The company, which began at Stanford University’s chemical engineering department, was founded in January 2010 and plans to use the latest funding to further develop its technology and establish partnerships.

Companies: Amazon, C3Nano, Coupa Software, Enhanced Equity Fund, Facebook, Groupon, GSR Ventures, Lightbank, linkedin, Mohr Davidow Ventures, New Enterprise Associates, Salesforce.com, Sprout Social, Twitter, WhiteGlove

People: Brad Keywell, Eric Lefkofsky

Article courtesy of VentureBeat » deals

Bankruptcy has a way of making a chief executive focus on what’s important. John Kispert, CEO of the once-bankrupt and now profitable chip maker Spansion, used the legal process to pare back and double down on innovation.

Today, the company is launching a new line of flash memory chips that Kispert says can be used in a wide variety of next-generation consumer electronics devices, automobile electronics, and game devices. If they take off, they can help Spansion thrive in a market with larger competitors and at a time of an overall industry recovery. It’s also a test as to whether pressing the gas pedal on innovation will help a once-struggling tech company recover.

The new chips are for the age of instantly accessible devices.

“What has changed in the last 18 months is that everybody wants a device that turns on instantly,” Kispert says. “That means the memory has to be interactive. That’s perfect for our business.”

The Spansion GL-S family of NOR flash memory chips allow you to tap a button and instantly begin using a device such as a car navigation system. They’re not the kind of popular NAND flash chips that are used as substitutes for large hard disk drives in laptops, as the Spansion chips range in density from 128 megabits to 2 gigabits of storage. Kispert (pictured below) says the chips are 45 percent faster than other competing NOR products from rivals such as Micron.

The new GL-S is two times faster than Spansion’s older products and 30 percent faster than rivals, based on third-party benchmark tests. Jim Handy, analyst at Objective Analytics, says the new chip family shows that the company’s technology has room to grow and that Spansion is executing well.

Spansion began working on the new product about 18 months ago, shortly after Kispert became CEO. But the company had high debt just as the big recession hit in 2008. It filed for bankruptcy protection in March 2009, laid off some employees, and transferred many of them to new owners when it sold off overseas manufacturing. The company has 3,500 employees now, compared to 9,000 before the bankruptcy. It exited unprofitable markets and focused on embedded products, or those in gadgets, game devices, medical, networking, cars or smart grid meters. In a car, for instance, the digital displays on the dashboard — which replace the old analog needles on speedometers and other instruments — use a lot of flash memory.

Since emerging from bankruptcy in May, 2010, the company has recovered along with the overall economy. It still has manufacturing facilities in Austin, Texas, and has dramatically improved its financial performance and balance sheet. Spansion is hiring again. Revenue has been growing for five quarters and the company has regained market share in the embedded market where it is focused. The company is still reporting breakeven results, but that’s partly related to a re-valuation of company assets during bankruptcy, and losses are declining. On a non-GAAP basis, the company is making money.

It’s still not completely out of the woods. It has $354 million in cash and is generating more each quarter, but debt is at $450 million. That would seem scary, but Kispert says the company has an advantage with its “charge trapping” nonvolatile memory technology. That technology enables cheaper, more flexible chips with a variety of paths for expansion. The company is partnering with another chip maker to apply the same tricks to NAND memory later this year.

The company has 2,000 employees in a factory in Austin that Kispert says is running “white-hot.” Kispert says, “That’s a testament to our determination.”

Tags: flash memory

Companies: Spansion

People: John Kispert

Article courtesy of VentureBeat » deals

$$$ Hisham Ezz Al-Arab, chairman of Commercial International Bank Egypt SAE, said today’s news was like Egypt “winning the World Cup” [Bloomberg]

$$$ “Professors at Texas A&M and Ohio State universities concluded that following contrarian investors is more profitable for stocks in which analysts and short sellers strongly disagree. In other words, buy if short interest is low and the analyst consensus is to sell; sell short if short interest is high and the analyst consensus is to buy.” [Reuters]

$$$ Fannie, Freddie Phaseout Proposed [WSJ]

$$$ Kinder Morgan’s Giant IPO [NetNet]

$$$ Bill Ackman’s Soft Power [BusinessWeek]

$$$ JPMorgan Names New Head for Mortgage Business [Dealbook]

$$$ Larry Fink’s positive outlook on Egypt, Facebook [FBN]

$$$ DIY igloo fails when Queens man can’t bear the cold and has to evacuate homemade snow shelter [NYDN]

Article courtesy of Dealbreaker

Today’s funding announcements include enterprise technology for geolocation apps and social networking:

DoubleDutch grabs funding to create check-in apps: The developer of mobile apps for businesses has raised a seed round of less than $1M from Charles River Ventures and others. The San Francisco-based startup, which announced its official launch at DEMO Fall 2010, is currently focused on building apps for enterprise events and field teams. One current implementation allows field technicians for a swimming pool company to check in to pools.

SpeakerText lands $600K to transcribe online videos: The San Francisco-based startup has raised funding to grow its web-based transcription service. The company’s tech, which uses speech recognition, natural language processing and machine learning algorithms, helps publishes improve SEO by making video text searchable.

Socialware raises $3M for safe social networking: The software developer has raised funding from FLOODGATE and others to help businesses remain compliant while using social networks. Based in Austin, Texas, the company helps customers like insurance companies manage social media while engaging with clients and partners.

Massive Health brings in $1.6M to help people lead healthy lives: The San Francisco-based health startup has raised $1.6M of an expected $2.3M in a first round of funding, according to a filing with the SEC. Founded this year and still in stealth mode, the company says it is focusing on mobile apps to help people manage their health.

Tags: DEMO, DEMO Fall 2010

Companies: Charles River Ventures, Doubledutch, Floodgate, Massive Health, Socialware, SpeakerText

Article courtesy of VentureBeat » deals

IT search engine provider Splunk is opening an office in Seattle, Wash., to try to acquire some of the talent in the area — and will be competing with a number of Web 2.0 titans and tech giants to do so.

Splunk provides IT professionals with ways to log any piece of information and quickly index it, find it and run a number of analytics functions on it. That can be GPS data, data from customer relationship management (CRM) software from Oracle or cell phone data — basically anything, as long as it has a time stamp. The service has a bit of a cult following among IT professionals and is a pretty strong candidate for an IPO this year.

Splunk is basically making a statement that it can compete with the likes of Google, Microsoft, Facebook and other Web 2.0 titans — all of which have offices in the Seattle area — for talented developers and engineers. The competition for talent in Silicon Valley is even more fierce, with basically every tech company in existence running a San Francisco- or Bay Area-based office.

It wasn’t a move to save money, either, said Splunk co-founder Erik Swan. The new office will serve as a home base for Brad Lovering, a Microsoft technical fellow that Splunk just hired, and as a recruiting central for the area. Splunk considered Los Angeles and Austin, Texas, as potential locations for new offices. Each spot has its own quirks and types of engineers and developers, and Seattle ended up being the best fit, Swan said.

Microsoft had a lot to do with that culture, said Swan. Founded in 1975, Microsoft has been based in Redmond, Wash., since its inception. Microsoft, along with Amazon, has attracted a large amount of system administrators and developers to the Seattle area, he said.

“Microsoft has done a brilliant job of building people who understand the developer ecosystem, what it means to support developers,” Swan said. “Much more so than the Valley.”

Splunk has raised $40 million in venture funding from Ignition Partners, August Capital, JK&B Capital, and Sevin Rosen Funds. The San Francisco, Calif.-based company brought in $66 million last year in revenue, up 96 percent from 2009, and signed on an extra five Fortune 100 companies as clients. Splunk currently has around half of the Fortune 100 companies as clients, and 2,500 customers overall.

The company has around 260 employees and also has an office in Hong Kong.

Tags: CRM, customer relationship management, hipster startup, IT, obscure, Seattle, silicon valley

Companies: Facebook, Google, Microsoft, Splunk

People: Brad Lovering, Erik Swan

Article courtesy of VentureBeat » deals

On September 7, 2010, the home of a single mother named Judith French was sold in a foreclosure auction, despite the fact that her lawyer, Richard Roman, had obtained a temporary restraining order. She then incurred $5,000 in legal fees, which a judge ordered JPMorgan, French’s mortgage servicer to pay. The bank has yet to do so, leaving Roman with no choice but to roll up his sleeves and take matters into his own hands.

The JPMorgan Chase & Co. branch in El Paso, Texas may have furniture and computers seized by the sheriff unless the bank complies with a judge’s order to pay the legal bills of a single mother whose eviction case he dismissed. The manager of the Chase branch was served on Jan. 26 with court papers that instructed the New York-based company to pay attorney Richard A. Roman’s $5,000 in fees, according to Detective Hector Lara, an El Paso County sheriff’s officer. The manager, Jose Gomez, told Lara that the branch’s gear is protected by the Federal Deposit Insurance Corp. and that he would contact the bank’s security staff and the Federal Bureau of Investigation, Lara said today in a telephone interview.

Lara said he’s waiting for an opinion from the county attorney on whether the bank’s property can be seized. “They don’t have a problem putting my client out in the street,” Roman said. “But when somebody prevails against a bank, they pull every string in the book to avoid paying.”

Now, all of a sudden, having heard their chairs and bathroom fixtures are at risk, a JPMorgan spokesman named Greg Hassell claims his team is “taking steps to pay.”

JPMorgan Faces Texas Sheriff [Bloomberg]

Article courtesy of Dealbreaker

Today’s announcements include one company that connects people for business and another that connects them for fun:

ReachForce grabs $4.6M to identify high quality business contacts: The software company has raised funding from MK Capital and GSA Venture Partners to generate B2B leads for marketing and sales professionals. The developer of predictive analytics software, based in Austin, Texas, helps clients like Citrix Online and Research in Motion (RIM) improve customer acquisition.

Atzip gets $614K to introduce cool people: The Menlo Park, Calif.-based startup has raised equity funding to introduce people to others in or near their zip code, according to a filing with the SEC. Co-founded by Jim Safka, former CEO of Match.com, the site asks users to fill out a profile and then lets them suggest social activities, like coffee or a cocktail, to other users. The site, still in beta, was founded in 2010 and is backed by Tugboat Ventures.

LibreDigital brings in $4M for e-publishing business: The aggregator of digital reading material has raised a new round of funding, peHUB reports. The Austin, Texas-based company is a preferred content aggregator for the Apple iBookstore and provides newspaper and magazine content for e-readers like the NOOKcolor.

Neuralitic Systems brings in $8M to analyze mobile subscribers: The Montreal, Canada-based company has raised a second round of funding led by Export Development Canada to help mobile operators maximize the return on investment of marketing spend. The company studies user data to help its clients attract new subscribers and retain old ones.

Companies: Apple, Atzip, Citrix Online, Export Development Canada, GSA Venture Partners, LibreDigital, Match.com, MK Capital, Neuralitic Systems, ReachForce, Research In Motion, Tugboat Ventures

People: Jim Safka

Article courtesy of VentureBeat » deals

Shares of Texas Instruments (TXN) are down 79 cents, or 2.3%, at $33.87 after the company yesterday evening reported Q4 revenue ahead of estimates and EPS substantially higher, and forecast Q1 results ahead of estimates. But there was some disappointment, it seems, by a greater-than-expected decline in orders of 9% [...]

Article courtesy of BARRONS.com: Tech Trader Daily