Altair Semiconductor is enabling, for the first time, the introduction of 4G connectivity to any and every device. By offering 100% LTE¬†semiconductor solutions, unhampered by the high cost of 3G, Altair is helping shift the communications ecosystem. The world‚Äôs largest carriers are recognising the value and cost benefits of Altair‚Äôs 100% LTE chipsets, triggering a profound shift in the cellular and broadband mobility landscape.
Kreos Capital committed $10m of growth debt financing to Altair Semiconductor in Q3 2012 and committed another $10m in Q3 this year.
What‚Äôs the biggest driver of growth in your business?
Altair develops world-class 4G LTE semiconductors ‚Äì 4G is no longer a ‚Äòfuture trend‚Äô but a reality in many markets providing user experiences which people could only dream about in the 2.5G and 3G days. Somewhat analogous to the fixed broadband revolution, mobile broadband is rapidly becoming a utility which people expect as a baseline feature of any device which has access to the Internet. Altair‚Äôs products are integrated into millions of commercial tablets, Netbooks, Chromebooks, personal hotspots, desktop modems and Machine to Machine devices. We are now on the verge of the second Internet revolution ‚Äì the Internet of Things in which exponentially more devices and sensors will get connected. LTE is an ideal platform for a very wide range of applications in this space, providing a very steep growth path for players such as Altair.
What‚Äôs the biggest challenge for your business?
The semiconductor industry is not an easy place for small/medium companies to build success long term. The costs and complexity of designing these System on Chips increase significantly with every new process node, and specifically in the wireless space the investment in software and carrier acceptance is much higher than in other segments. We also compete with much larger and more established players. This forces us is to have razor-sharp business focus, flawless execution and a great deal of technological innovation – so in a sense it brings out the best in us.
What have been your key learning experiences so far?
Great technology is the starting point. From that point building customer relationships, building credibility in the marketplace, and establishing quality brand recognition is essential. Our customers and their respective customers invest millions of dollars in R&D and productisation and without them trusting not only our products, but also our ability to support them technically and commercially in the long term ‚Äì they would have a difficult time making such a ‚Äòbet‚Äô. It took us quite some time to build this credibility and get to a point of shipping millions of chips to an end carrier/customer such as Verizon Wireless for example.
What are your expectations for exit?
We are in value creation phase, we are busy building our business such that it would be sustainable and profitable in the long run. In order for that to happen, we need to grow. Our plan is to go public timing will depend on how well we grow our business and of course all relevant market conditions.
What advice would you offer to other growth companies about how they finance their businesses?
Capital is key ‚Äì manage your capital carefully and efficiently. Small companies cannot afford running ¬†several projects in parallel under the assumption that some of them will succeed while the others won‚Äôt ‚Äì you have to hit almost every time, you can‚Äôt afford less than excellent execution, you have to be very focused and targeted.