UK start-up, Picochip, secures first round funding for technology to speed the rollout of 3G wireless technology

Picochip Designs Ltd (www.picochip.com) a UK start-up that designs semiconductors targeting the 3rd-generation mobile base station market, today announced that it has secured first round investment from Pond Venture Partners and Atlas Venture.

Picochip's uniquely flexible chip technology allows the development of base stations that mobile operators can cost effectively deploy and upgrade, without having to replace obsolete hardware each time. Base stations are the heart of a mobile network and contain the complex equipment required to transmit and receive wireless voice and data from mobile phones. Continually evolving standards will require constant upgrades to base stations over the coming decade in order to extend their performance.

Picochip's flexible technology is attractive because it is faster to develop, cheaper and less power hungry than today's solutions. Mobile operators are under intense competitive pressure to implement 3G infrastructures to capitalise on expensive license purchases, so maximising performance and minimising cost of deployment is a vital concern.

Picochip has developed and patented a highly innovative parallel hardware architecture, the 'PicoArray', and a set of software tools to map algorithms for decoding mobile transmissions onto this chip. Each chip consists of up to a thousand processing elements, compared to less than ten on competitors' designs. Their system allows the algorithms to be changed and refined without any need to replace the underlying hardware. Picochip's solution aims to ease the lengthy design cycles and upgrade process required with current base station technology.

The Bath-based team at Picochip has extensive knowledge in chip design, wireless system architecture and transceiver design. The founders have a proven track record in building digital signal processors at Oak Technology (latterly Conexant) and Lucent. Peter Claydon, COO is the Ex-Managing Director and Founder of the UK subsidiary of Oak Technology. Having built his team there from scratch, Peter has now been joined at Picochip by around a dozen members of the original group. Peter and his team are recognised in the industry for developing the world's first single-chip demodulator for European digital terrestrial television in January 1999.

Commenting on the deal, Peter Claydon said: "It is a testament to the potential of our technology and strength of the team that we have been able to attract investment from quality backers such as Atlas Venture and Pond Venture Partners. Both VCs have a strong track record in developing commercially successful companies from early stage technology propositions such as ours and will work closely with us in the future. Receiving support from these two leading VCs will provide a good commercial resource to complement the technical ability of the team."

Richard Irving, CEO of Pond Venture Partners, said: "We believe Picochip's combination of world-class silicon expertise and state-of-the-art wireless system knowledge gives them a unique edge in the turbulent world of next generation wireless systems. The quality and drive of the Picochip team bears strong similarities to Pond's first investment, Microcosm Communications, also based in the southwest. We believe Picochip has the core technology, essential to any Pond investment, which will enable them to grow into a large international company. As with all our investments we will work intensively with the company to maximise this success."

Graham O'Keeffe, Principal, Atlas Venture said: "Picochip is an important investment opportunity for us because of the quality of the founding team and the prospects for their ground breaking technology which targets a highly attractive market. Furthermore, Picochip has good synergy with previous Atlas investments in the communications sector, such as Element 14, Radioscape and Systemonic. Picochip is a good example of Atlas Venture's commitment to identifying high potential early stage technology companies and building them into market leading companies."

About Pond Venture Partners

Pond Venture Partners Ltd. manages venture capital funds exclusively targeting early-stage technology companies in the UK and Europe. By working closely with founders and management to add value to its companies, through customer introductions at senior levels, helping establish US and Japanese operations, and managing subsequent venture rounds, Pond is bringing Silicon Valley-style venture capital to Europe. With offices in London, Silicon Valley and Tokyo, Pond has $90 million under management. Pond is regulated by IMRO. For more information please see our web site at www.pondventures.com

About Atlas Venture

Atlas Venture is the leading international, early-stage venture capital firm investing in communications, information technology and life sciences companies. With offices in Amsterdam, Boston, London, Menlo Park, Munich, Paris, and Seattle, Atlas Venture's investments are split evenly between the United States and Europe. Founded in 1980, Atlas Venture has established six international funds, and currently manages over $2.5 billion in committed capital. The Atlas Venture investment team is comprised of seasoned operating executives and career venture capitalists that have been deeply involved in the formation and development of more than 300 companies worldwide.

For more information, visit the Atlas Venture website at www.atlasventure.com. For further press inquiries, please contact Ed Jezard (tel: 020 7313 4765 or ed@gnash.co.uk) or Kate Jenkins (tel: 020 7313 4769 or kate@gnash.co.uk) at Gnash Communications.