Icera plans listing worth up to $1bn

Financial Times

Icera, the Bristol-based wireless chip company, is planning a stock market listing with an estimated value of between $600m and $1bn (£618m).

The move would be the UK's first semiconductor flotation since CSR, the bluetooth chip company, went public in 2004.

Icera was co-founded by Stan Boland and Simon Knowles, who previously founded Element 14, a chip company that was sold to Broadcom for $594m in 2000.

However, Icera has yet to make a profit and is reluctant to give any details of its recent revenues. In the year to March 2007 - the latest figures available from Companies House - revenues were just $1.86m.

Nevertheless, 2010 is expected to be a breakthrough year, with products containing Icera's chips rolling on to the market in bigger volumes.

Mobile phone operators including Orange, Vodafone, AT&T and Japan's Softbankuse Icera chips in mobile broadband "dongles", allowing them to connect laptops and other devices to wireless networks. The chips are also in dongles made by Nokia and in Plastic Logic's eReader, to be launched this month.

Stan Boland, co-founder and chief executive, said: "We want to build a company worth $10bn to $15bn in the next few years."

Such a valuation would make Icera the UK's largest semiconductor company, bigger than Arm Holdings, which has a market capitalisation of about $3.2bn and on par with US-based Broadcom, valued at $15bn.

A hurdle will be to get Icera wireless chips embedded in mobile phones. The dongle market is growing - about 50m units sold in 2009, to about 72m this year - but is tiny compared with the more than 1bn handsets sold each year.

"They need to move beyond the dongle. The home run would be getting into phones," said Michael Thelander, chief executive of Signal Research Group, a wireless research company.

Icera is one of the biggest bets the European venture capital community has made on semiconductors, having raised $205m in six funding rounds, including $70m last year. The company is expected to float within 12 months.

Many of Europe's prominent venture capital groups have a stake in the company, including Amadeus Capital Partners, Atlas Ventures, Balderton Capital, Accel Partners and Advent. If they were to be burned by failure, it would have a chilling effect on sector investment.

"There is an increasing reluctance to fund semiconductor companies because of [how much] it costs to start," said Hermann Hauser, Amadeus co-founder. "We have been patient with Icera - but the big question is whether it is going to be as big as we thought."