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Wireless High-Definition (HD) video streaming for home networks is hot right now. We saw this at the GSA luncheon earlier this year when Henry Derovanessian, the Vice President of Set-Top Box Engineering for DirectTV outlined his vision for future video distribution inside the home. More recently, fabless semiconductor startup Quantenna was able to raise $14 million in funding for Wi-Fi chip development to enable the wireless distribution of several concurrent 1080p HD streams. The other day, fellow semiconductor startup Celeno Communications was able to raise an additional $12 million in funding for wireless multi-media streaming as well. This investment round was lead by Liberty Global, Inc. but previous investors including Cisco, Greylock Partners, Miven Venture Partners, and Pitango Venture Capital partook in it as well. Founded in 2005 by Gilad Rozen and based out of Ra’anana, Israel, Celeno has now raised a total of $44.2 million in funding. Between Quantenna and Celeno, these two companies have raised over $120 million in funding over the last 5 years. Below is an illustration taken from Celeno’s website depicting the near future state of the home network as envisioned by the company. This picture is in complete agreement with what Henry showed in his slides at the GSA luncheon, and is really not that far removed from what many of us have in our homes presently. The only difference being that some of the devices such as the DVR or set-top box which deliver HD content might be hard wired though a coaxial cable or some other means to the home network.

Probability calculations are an essential part of mathematics for which the applications are boundless. Most modern applications such as spam filtering, financial modeling, and search processing utilize probability calculations in their algorithms. The problems is that the Boolean algebra which is utilized by most modern processors these days and relies on 0s and 1s, is not very well suited for these types of calculations – at least this is what the founders of Lyric Semiconductor are betting on. A spin-out from the Massachusetts Institute of Technology (MIT), and thus not surprisingly based out of Cambridge, MA, Lyric has set out to utilize transistors more or less like dimmer switches rather than devices which are either on or off. The degree to which these devices are on can thus be seen as probabilities. As such, the company has developed a family of logic gates which rather than being constrained to processing 0s and 1s, are suited to determining the probability that a bit is a 0 or 1.

Last time we caught up with Quantenna was back in May of last year, shortly after the company raised $14 Million in Series C funding. It seem that venture capital firms have been kind to the company since then, allowing to company to go back to the well twice and raise some additional funding. In February, Quantenna raised $15 Million in Series D funding from existing investors which included Grazia Equity, Sequoia Capital, Sigma Partners, Southern Cross Venture Partners, Swisscom Ventures, and Venrock Associates. This funding was intended to accelerate the volume production of the companies Full-11n 4x4 Multiple Input Multiple Output (MIMO) Wi-Fi chipsets. For a more detailed info regarding the company’s technology please read out previous post, but in summary the 4x4 MIMO technology should theoretically allow for devices featuring these chipsets to wirelessly distribute multiple 1080p HD streams concurrently. It seems that the $15 million infusion was not quite enough, since just last month Quantenna raised another $21 Million in Series E funding. This round was led by new investors DAG Ventures in addition to several of the existing investors who partook in this round as well. This time around the funding is intended to accelerate product deployment, which seems like a logical step after ramping volume production.

At least this is what a recent article written by Jim Truley for the Linley Group suggests. Titled “How to Blow $100 Million” the article examines on a high level the costs associated with starting and running a new semiconductor venture through the first few years. The estimates presented in the article are focused on a startup which intends produce an entire SoC instead of single-function chip, and as such the rule of thumb estimate of about a $100 million seems inline with what has been suggested by VCs in one of our previous posts. Most semiconductor startups we have covered over the last few years don’t come close to this number, so I still would contend that it might be a bit on the high side. Then again, many of these startups are focused on SoC that are either limited in scope, or single-function chips that more often than not are either mixed signal ICs or digital implementations of analog circuits, which might explain the funding discrepancy. Additionally, raising too much capital initially can also be problematic, for it is not desirable to sell off too much of the company at a low valuation. Thus, it might be that these companies are hoping to raise more money in the future if things go well. Either that, or like Jim suggests the funding requirements by these companies are severely underestimated.