Montalvo Systems has been seeking a hoard of cash in its latest fundraising round, but the chip startup is dangerously close to running out of money, VentureBeat has learned.
Although it raised $73 million, the company has run into problems finishing a chip that will compete with Intel in the low-power portable devices market, a market where chip giant Intel has become increasingly competitive. The company grew to nearly 300 employees in Santa Clara and India, resulting in a big burn rate and forcing the company to go back to fundraising. (our past coverage).
“There are a lot of people and burning it quickly,” said one venture capitalist who received a pitch but declined to speak on the record. “No matter how much money you raise, it won’t last long. ”
Reached by phone, Montalvo CEO Matthew Perry declined comment. At this exact moment, I’m not sure of Montalvo’s status but I have heard enough to be able to say as much as I am in this story. One source told me the situation is fluid.
If Montalvo is unsuccessful in saving itself, that says a lot. It’s increasingly difficult to challenge Intel in the $30 billion x86 (Intel-compatible) microprocessor business, as Montalvo tried to do. It also shows that creating complex chips in this day and age is not an easy feat, even with tens of millions of dollars and hundreds of engineers. And it provides further evidence that venture capitalists are shying away from increasingly expensive semiconductor start-ups.
The company attempted recently to raise more than $100 million from investors but apparently has come up dry, VentureBeat has learned. Read the rest of this entry »
