Investors Look to Brighten SolarFlare Coffers
By ANDREW SIMONS
Irvine-based SolarFlare Communications Inc. is closing in on a second round of venture funding believed to be about $13 million.
The communications chip startup declined to comment on the amount it’s seeking.
Investors in this round include Corona Del Mar’s Miramar Venture Partners and two venture firms from a first round of funding, Foundation Capital and Sequoia Capital, both of Menlo Park.
Last year, SolarFlare landed $12.3 million in funding.
The company has kept its costs in line with the financial plan it laid out last year.
“I think we have demonstrated success even in today’s climate,” said Ahmet Tuncay, SolarFlare’s vice president of marketing.
SolarFlare investors believe the company could be in the right place at the right time. Where money once flowed into companies that do business over the Internet, funding has shifted to companies that make the pieces of data networks.
Among those are designers of communications chips,SolarFlare’s specialty.
The company hopes to cash in on companies’ need to transfer data around their networks at much faster rates without replacing expensive equipment.
SolarFlare hopes its chips will allow current networking gear, which transfers data at around two gigabits per second, to interact with newer gear, which will transfer data at 10 gigabits per second.
Storage networking gear companies, such as Costa Mesa’s Emulex Corp. and Aliso Viejo’s QLogic Corp., have posted sales increases despite the general slowdown in technology.
Both companies have been upgrading to 10-gigabit gear in the past year and are unveiling trial versions of the product this year.
SolarFlare is a so-called “fabless” semiconductor company. Like Irvine-based communications chipmaker Broadcom Corp., SolarFlare doesn’t own a chipmaking plant. Rather, it designs chips and plans to farm out the production.
SolarFlare has work to do. The company has boosted its marketing efforts as it lines up potential customers and has increased its staff,it now employs 47 people, up from the 16 workers a year ago.
All of SolarFlare’s management team hails from PairGain Technologies Inc., the former Tustin-based company that’s now part of ADC Telecommunication Inc. Broadcom founders Henry Samueli and Henry Nicholas also worked at PairGain.
Though Tuncay isn’t talking about his plans for SolarFlare, the chips he’s designing could be attractive to large networking chipmakers such as Broadcom or Newport Beach-based Conexant Systems Inc.
Other OC chip startups have landed funding recently.
Irvine-based Morpho Technologies Inc. received an undisclosed investment from Motorola Inc. and other unnamed investors in October. The company said earlier this year that it had been aiming to raise $10 million.
And Irvine chip designer U-Nav Microelectronics Corp. raised $10 million in a second round of venture funding in August, bringing its total investment to $14 million.
