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April 01, 2005
Vinod Khosla Doubles Down
Seems Kleiner Perkins Caufield & Byers and Vinod Khosla liked what they saw from chipmaker eAsic. The VC firm and its partner have invested an additional $7.5 million in the six-year-old company. Khosla, who downshifted from managing partner to partner and went part-time at KPCB last year, invested his own money in the deal. The infusion was the second tranche of eAsic's third funding round. Last May, the company raised a $5 million first tranche from KPCB and Khosla. The investors had an option to put in more money if eAsic hit certain milestones, such as delivering a product. At long last, the company expects to begin taking orders for its programmable chips next month.
The chips can be customized for use in a variety of products, including wireless devices, medical equipment, printers, and storage equipment. eAsic says it has slashed the cost of developing such chips from $20 million to $1 million, making them affordable to more companies than ever. The chipmaker has already licensed its technology to one paying customer, STMicroelectronics.
At KPCB's request, semiconductor guru Atiq Raza serves on eAsic's board, as does Khosla. Including funding from angel investors, the company has raised a total of $15.5 million so far. Several VC firms wanted in on the latest funding round, and eAsic is likely to raise another round within a year.
Khosla changed his role at KPCB last year when the company raised its eleventh fund, a $400 million war chest. As part of the transition, he appears to have struck an arrangement in which he may bring deals to KPCB and invest his own capital alongside the firm. We put in calls to KPCB seeking clarification. In the case of eAsic, Khosla sourced the deal and brought it to KPCB. As an individual investor in the company and a partner in KPCB's current fund, Khosla looks set to win double if the chipmaker is a hit.
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