Startups + Strategic Investors = WIN | WIN

Jul292015

Investors and entrepreneurs converged at the third annual Silicon Innovation Form at SEMICON West to pitch new technologies, collaborate with ecosystem partners and spark new innovations.

I’m pleased to report the third annual Silicon Innovation Forum (SIF) was a success! Held in conjunction with SEMICON West earlier this month, the forum has really gained momentum since it began three years ago, and proved invaluable in bringing strategic investors like Applied Ventures together with decision makers and new and emerging early-stage technology companies. This year’s program drew record participation from startups and corporate investors alike, and is helping extend the R&D pipeline from concept to commercialization.

We continue to receive positive feedback on the many networking and fruitful opportunities that have blossomed over the years. Our portfolio companies have secured additional funds as a result of conversations sparked at SIF, and we are actively exploring new investments in presenting companies from the show. All to develop innovative solutions in equipment and materials that will drive the semiconductor industry forward to the next era of connectivity and beyond.

Applied Ventures is a member of the organizing committee and founding member of SIF, and we understand the valuable role corporate VCs can play in funding startups to keep innovating and solve industry problems faster and better than ever before. Some of the exciting new technologies presented this year included silicon thermo electronic technology for wearable devices and applications in the Internet of Things (IoT), cost-effective 3D printing techniques, CMP slurries for planarization for high-aspect ratio structures, power management IC, and bio medical applications, among others.

I was joined by peers from across the VC ecosystem for the investor panel, where the conversation explained how together corporate VCs, academia, incubators and consortia can bring a holistic best-in-class package of resources to startups that encompass valuable relationships, R&D and expertise necessary to bring technologies to market. We also discussed the increasing role strategic investors are playing as traditional VC funding ebbs and flows.

Compared to previous years, investments in semiconductors are starting to increase fueled by IoT and our expanding connected, always-on world. And while the number of VC-backed deals in the semiconductor industry has remained relatively constant, the  average deal size and total amount invested has rebounded significantly to $910 million in 2014 after dropping 26% in 2013 (Source: Pitchbook). Of those, last year approximately 17% of deals in the semiconductor space included at least one corporate VC as a strategic investor. This is up from 13% in 2012, but still not as high as it was in 2008 at 20.8% (Source: Thompson Reuters).

During the panel we also discussed future investment trends. I, for one, expect we’ll see more hardware companies investing in increasingly attractive and overlooked opportunities beyond the current crop of headline-grabbing billion-dollar unicorn startups. I suspect the next breed of hardware companies will be more capital-efficient and succeed as total solutions providers, with hardware enabling disruptive value creation in emerging IoT, automation and wearable applications.

Thanks to those who came out to SIF at SEMICON West, and we look forward to another engaging program at SEMICON Europa this October and extending the program to SEMICON Japan in December. You can also continue the conversation online at @applied_vc or email us at applied_ventures@amat.com.