Montreal fabless semiconductor startup Spark Microsystems has raised a $17.5 million CAD equity financing round to bring its wireless transceiver tech to market.
The round was led by cleantech investor Cycle Capital and included new investors ND Capital and Export Development Canada. Existing investor Real Ventures also participated, as did former Qualcomm CEO Paul Jacobs and Sanjay K. Jha, the former CEO of GlobalFoundries.
“We want to extend what wireless can do,” said Frederic Nabki, Spark’s co-founder and CTO.
Spark plans to use the fresh capital to fund high-volume manufacturing of its wireless transceivers. The startup also plans to bolster its sales efforts, as well as expand research and development (R&D) for its next-generation products.
Founded in 2016, Spark designs, verifies, and sells transceivers that use ultra-wideband (UWB) tech to facilitate low power, low latency wireless communications faster and more efficiently than legacy protocols like Bluetooth. According to Spark, its technology reduces energy consumption and enables a greater number of short-range cable-free applications in the industrial internet-of-things (IoT) and consumer electronics spaces, including augmented reality and virtual reality, gaming, and audio.
Frederic Nabki, Spark’s CTO, co-founder, and founding CEO, told BetaKit the company “wants to extend what wireless can do.”
Spark initially announced its new SR1000 series of wireless transceivers last March, but when COVID hit, the startup “got into belt-tightening-mode,” switching from pushing a go-to-market, product development-heavy strategy to focusing on cash preservation.
A June 2020 report from McKinsey predicted most semiconductor segments would experience negative year-over-year revenue growth last year due to COVID-19. However, McKinsey anticipates the situation will improve to some degree in 2021, “as most end markets recover.” The report highlighted that “companies that proceed with plans to create next-generation products, purchase equipment, or make similar investments will be prepared if demand surges as the economy recovers.”
Amid pandemic-related uncertainty, the company initially scaled back its commercialization efforts and the development of its next-generation tech, but as it made progress with strategic customers and in vertical markets last year, Spark realized the timing was ripe to take its tech to market and bolster its R&D, and its investors agreed.
“The goal is to spend as fast as we can and gain as much [market] traction as we can,” said Spark’s CEO Fares Mubarak, who took over as CEO in 2018. “In the COVID world, we felt we needed to have a longer runway to be able to execute our plan, and this [funding] enables us to get that runway.”
Mubarak said the company’s balance sheet following this round is “very solid,” and gives Spark the runway it needs to push its go-to-market strategy and pursue its next-generation product into 2023. He expects the startup will not need to consider raising more capital until then.
To date, Spark has raised approximately $19 million CAD in equity financing. The company has also received a $2.2 million grant from Sustainable Development Technology Canada, and participated in Centech in Montreal; Silicon Valley-based Silicon Catalyst, a semiconductor-focused incubator; and Cycle Capital’s Ecofuel Accelerator.
“In just four years since the Ecofuel Acceleration program, Spark Microsystems was able to deliver a revolutionary low-power wireless solution to customers,” said Andrée-Lise Méthot, founder and managing partner of Cycle Capital and chair of the Ecofuel Accelerator.
“We believe that Spark will not only enable battery-less networks and dramatically cut power consumption across a wide range of emerging wireless applications but also reduce electronic waste going to landfills,” Méthot added.
As part of the round, Amit Srivastava, senior partner at Cycle Capital is joining Spark’s board of directors. Srivastava previously led venture capital investments in electronics for JP Morgan Partners and held marketing and engineering management positions at Texas Instruments.
Over the next two to three years, Spark plans to work to ensure its technology becomes a “de facto” industry standard and Institute of Electronic and Electrical Engineers (IEEE)-certified for UWB wireless tech. The company predicts the latter process, if successful, will take two to three years.
Currently, Spark employs 40 people in Montreal and the United States. Over the next 18 months, the startup plans to double the size of its team, aiming to hire at least 15 sales workers and applications engineers.
Photo by Sam Pak on Unsplash