MOUNTAIN VIEW, Calif. In an effort to accelerate system-on-a-chip technology, Synopsys Inc. has announced a venture capital fund aimed at emerging intellectual property (IP), EDA, and design services providers.
Synopsys is committing an initial $20 million to the fund, with an additional $20 million allocated for follow-on funding.
Synopsys has already named two early recipients of funding: Synchronicity Inc. (Boston), a provider a Web-based project management software; and The Silicon Group (Austin, Texas), an IC design services firm. With the funding, Synopsys takes a minority stake in each company.
"The purpose of the fund is to help realize systems on silicon," said Bob Dahlberg, vice president of business development for Synopsys (Mountain View, Calif.). "Our charter as a company is to solve this problem, but we realize we can't do it all ourselves." Additionally, Dahlberg said Synopsys is sitting on $600 million in cash that it needs to invest.
Synopsys has previously made minority investments in a handful of companies, including Artisan, nVidia, Gambit, and Cooper & Chyan Technologies. But the company's approach will now be more systematic, Dahlberg said. "These previous investments were ad hoc. We didn't have people searching out opportunities," he said.
Synopsys' venture fund will target four types of companies, Dahlberg said: emerging providers of "star" intellectual property (IP); companies that address the design infrastructure, such as Synchronicity; EDA startups with tools complimentary to those of Synopsys; and design consulting firms such as The Silicon Group. In general, Synopsys will target companies that are not viewed as competitive.
Synchronicity was chosen, Dahlberg said, because chip design is getting more complex and requires widely distributed design teams. Further, Synopsys' design reuse consulting group is a customer of Synchronicity. The Design Group, on the other hand, has worked with Synopsys' Epic division on several projects.
Dahlberg declined to reveal the percentage of ownership Synopsys will assume in these companies, but said Synopsys generally keeps its investments below 10 percent of a given company's stock.
It's possible that Synopsys will someday buy one of the companies it invests in but that hasn't happened yet. Synopsys was considering an investment in Everest Design Automation, but decided to buy the company outright instead, Dahlberg noted. Cadence Design Systems Inc. ended up purchasing Cooper & Chyan; as a result, Synopsys still owns some Cadence stock.