Chip upstart Morpho Technologies Inc. hopes to land $10 million in a second round of funding, slated to close this September, according to Chief Executive Fhahriar Sadri.
“Ten million dollars is our target. We think we can get it,” Sadri said.
Irvine-based Morpho,which is just up the block from Newport Beach-based Conexant Systems Inc., OC’s biggest chipmaker,closed its first funding round in October, raising $5.4 million from several venture capital firms, including Los Angeles-based SmartTech Ventures and San Diego-based Nextreme Ventures. Chip designer Cadence Designs also invested money in the round, which helped Morpho get business operations started.
Morpho executives hope to use money raised in the new round to augment its staff of 34, most of whom were engineers at the University of California, Irvine. Like several other OC chip companies, Morpho boasts a large complement of Ph.D.s on its staff,13.
“The core technology team is complete. We’re just looking to build up the many other sides of our team. Especially the marketing side and our application engineers,” Sadri said.
Company executives expect both SmartTech Ventures and Cadence Designs to return for the second round, but the company still is seeking a lead investor after Nextreme opted out.
Morpho designs a kind of chip called a fully configurable digital signal processor,a design that will be cheaper for the company’s customers because changes to the processor can be made using software instead having to redesign the chip.
“It is a core design that is very flexible and can be used for many applications,” Sadri said.
Morpho got its start after a group of engineers at UCI received a grant from the Defense Advanced Research Projects Agency, or DARPA, the research branch of the Department of Defense. Before the group decided to form a private company, it finished a design for the government. The basic design for the company’s chip is the same design as the chip the group submitted to the government, Sadri said. “Sometimes these DARPA grants end up becoming private companies,” Sadri said. “That’s what happened to us. The entire team came over to Morpho.”
Morpho’s search for funding comes at a time when private investors are anteing up funds for new chip and electronic component makers despite the general technology slump. Morpho’s quest follows several recent funding wins among OC’s start-up chipmakers, including 3DSP Corp., Valence Semiconductor Inc., TransDimension Inc. and Y Media Corp., which together netted nearly $88.5 million. In all of last year, venture capitalists sunk $1.5 billion in OC companies. n