With Icera sold, spotlight turns on picoChip

With Icera now sold, the spotlight moves onto picoChip as the UK’s leading VC-backed private company and its plans for a liquidity event via IPO or trade sale.

Icera’s West Country neighbour picoChip has a similar profile to Icera – VC-backed, ten years old compared to Icera’s nine years, both in the wireless IC business, Icera with $250m of venture money, picoChip with $100m.

“They were a big hairy audacious play - we’re much more conservative,” says picoChip’s marketing vp, Rupert Baines, “we’re doing well by focussing on what the customers need to keep them happy.”

Will picoChip go for a trade sale like Icera or will it wait for an IPO? “Four out of five VC exits are trade sales,” replies Baines, “we’re working for an IPO, and the assumption is we’ll IPO next year but, if someone comes along with a big enough cheque, we’ll take it.”

Baines is enthusiastic about what Icera has done. “They’ve done some really good stuff,” he says, “they’ve got a brilliant product.  They’ve done something really cool – they’ve got something which works in one of the toughest markets. Not many people have done that well in that brutal market. Combined with Nvidia, Icera will be a powerful company.”

But shouldn’t that $250m have spawned a successful independent player? “It costs a lot to build a wireless chip company- - how much did Intel put into their wireless group?” asks Baines, ($12bn+ is the answer), “look what Broadcom has done over the years in buying companies and building successful businesses.”

Surely expectations for Icera were higher than what transpired? “From an investment point of view it’s not what the VCs hoped for – but it wasn’t a bad investment,” responds Baines, “the FTSE was at 5,200  in 2002 (the year Icera was founded) and was at 5,900 last month. If Icera returned 30% then it beat the FTSE. Most of the companies I’ve got shares in I’d have been glad if they’d gone up 30% in that time.”