imec.xpand launches second semiconductor fund with €300m
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Imec.xpand has raised €300m for its second fund for semiconductor and nanotech startups in Europe.
The imec.xpand fund aims to invest in 25 startups and support its existing companies as they scale up.
“Today we have made seven investments and we expect to make 25,” Tom Vanhoutte, co-founder and partner at imec.xpand tells eeNews Europe. “What we saw in the first fund was it was not big enough to get to the point to be appealing to the larger investors and with the second fund we think we can do that.”
“We can invest up to €45m in one company, but that would be pretty extreme. A number will show promise early on and those will get more funding early on, and we would expect that to be €30m,” he said.
“The key is to be in the company early on with a significant stake We believe we are better placed than most to asses the technology risk and that has been proven with the 16 companies in fund 1, 15 of those have developed their technology in the best possible way.”
The first imec.xpand fund was launched in 2017 with the strong support of imec, investing in 23 companies that, so far, have raised nearly €1.5bn in financing and includes two unicorns. It raised €150m in 2022 as the start of this round and an additional €150m brings the total for the current round up to €300m.
“Peter [Vanbekbergen] and I founded xpand ten years ago to help develop deeptech startups,” he said. “We are totally independent and imec has no say in our governance but we do get a lot of benefit from the partnership, whether it is access to imec spinoffs, networks and limited partners (LPs) in the fund, and imec uses the fact that it has a friendly fund to get a good start for a fighting chance for success.”
The fund deliberately invests in global semiconductor startups.
“We don’t believe that Europe has to strive for independence in the semiconductor industry,” he said. “We believe that Europe can play a significant role in the semiconductor space and being dialled into the big hubs in the US and Taiwan is crucial for success. We hope in the future we will have the same depth to skills and financing so supporting strong European startups in partnerships with US stakeholders is the best approach. We invest in Silicon Valley as it helps us build a network that we use for the benefit of European startups through the connections with VCs and corporate investors.”
Providing a significant stake early on is key to avoiding the investment being diluted in further rounds, which for semiconductor companies can be significant.
“We try to follow in the next round and we will be diluted but eventually our stake will be interesting for investors,” he said. He points to the invesmtnet in Celestial AI in Palo Alto as an example.
“With Celestial AI we were the first investors in the $9m seed round and has now raised $200m. We have not followed every round but we are still a significant shareholder.”
- PsiQuantum raises $600M for first hyperscale quantum computer
- Swave to show its 3D holographic chip
- Celestial AI raises US$175 million for photonic fabric
As well as Celestial AI, portfolio companies include PsiQuantum, a frontrunner in the race to develop the first practical quantum computer that this week raised $600m and Swave Photonics, which is set to show its holographic extended reality chip technology designed to disrupt 3D holographic imaging and spatial computing.
“What’s important is for the time being we have to realistic about what we can do in Europe today,” he said. “We are convinced if we can show with one or two companies be successful in semiconductors then the ecosystem will grow and that will create a positive spiral but it will take time to do that. Imec.xpand is not just about funding startups, it’s about building companies that can lead the next wave of technological transformation.”
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