June 5, 2007
Valley VC funding gives way to private equity
Silicon Valley is renowned for the contribution that venture capitalists make to its ecosystem, but it is the larger private equity guys that are currently taking centre stage.
Targeting mature companies rather than promising start-ups, deals worth hundreds of millions of dollars instead of seed funding are taking place.
On a manic Monday, Elevation Partners, the Menlo Park fund starring U2’s Bono, paid $325m for a 25 per cent stake in the handheld maker Palm, based in Sunnyvale.
Blackstone Group and Kohlberg Kravis Roberts also were reported to be in talks to buy the San Jose chip designer Cadence, which has a market value of more than $6bn. KKR had invested $700m in Sun Microsystems earlier this year.
The interest is a reminder that the Valley and Bay Area is not just a place of dot.com innovation, but has its deep roots in mature hardware and software companies. Private equity is attracted more by their strong cashflows and reserves than the prospect of rapid growth on the back of technological advances.
long overdue.
Posted by: barrie harrop | June 6th, 2007 at 7:35 am | Report this comment