LONDON Baseband chip supplier PicoChip Design Ltd. has secured an additional $20 million of equity funding to support expansion plans in the femtocell market. The ten-year-old company said it is on track to achieve 50 percent quarter-on-quarter sequential revenue growth in the second quarter.
PicoChip's existing investors Atlas Venture, Highland Capital Partners, Intel Capital, Pond Ventures, Rothschild, Samsung, and Scottish Equity Partners all participated in the funding.
PicoChip also took on $20 million of equity funding in November 2009 while it took in about $20 million of revenue in calendar 2009.
The growth in demand for the company's products is driven by the picoXcell product family that is powering the global deployments of 3G femtocells. With the growth in mobile data traffic, these low-cost plug-and-play infrastructure devices are increasingly viewed as the key to the architecture of all future cellular networks, the company said.
Research from industry analyst ABI indicates that over 60 carriers around the world are engaged in femtocell trials and evaluations, that more than 50 percent of U.S. households are interested in femtocell products, and that femtocell shipments will exceed 40 million units per year by 2014 (see Femtocells set for explosive growth, says iSuppli).
PicoChip said it has 25 femtocell customers and products supporting the HSPA+, LTE and TD-SCDMA cellular standards. These customers include Alcatel Lucent, Sagem, Ubiquisys and ip.access. PicoChip is adding engineers at its development centers in Bath and Beijing, and will move to a new headquarters in Bath, UK. The plans also include accelerated product development in key areas such as LTE, HSPA+ and self-organizing networks.
"A major shift is happening in the cellular market, creating big opportunities for PicoChip. With our field-proven technology, volume shipments and fast revenue growth, this investment allows us to move aggressively to grasp those opportunities," said Nigel Toon, CEO of PicoChip, in a statement.
"Our newly strengthened balance sheet gives us a solid platform on which to base the next phase in the company's development," said PicoChip chairman Jonathon Brooks. Brooks was financial director of ARM from 1995 to 2002, which includes the preparation for and dual-listing of the company on the London Stock Exchange and NASDAQ.
In addition to residential and enterprise applications, femtocells' plug-and-play self-organizing network technology is also being applied to extend high speed 3G/4G services into buildings and public spaces and to expand coverage and capacity in metro and rural areas.