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Intel Capital 'Ahead $2B'

With so many startups in trouble in the communications market, you'd have thought that any venture capital company that had invested in 300 of them would be in trouble itself.

Not so. Intel Capital has done just this and made a whopping big profit. "We're ahead by $3 billion to $4 billion," Mark A. Christensen, corporate VP and director of communications sectors, told Light Reading in London today. "Even if we lost everything in our current portfolio [which he values at $1.5 billion], we'd still be $2 billion ahead."

Christensen says that Intel is investing less in optical startups at present, but that's partly because valuations have come down a lot, so "you can invest a lot cheaper."

The latest example of this is Intel's acquisition of New Focus Inc.'s (Nasdaq: NUFO) tunable laser business for about $50 million in cash (see Intel Buys New Focus Laser Division). "We believe that tunable lasers will be the next breakthrough," says Christensen. Current pessimism about the technology (see Tough Times for Tunable Lasers) is simply because the market for tunable lasers is "too early in the cycle," he says.

Christensen admits that Intel has lost "a few" startups. It also lost its stake in Yipes Communications Inc. by declining to participate in the company that brought the Ethernet services provider out of Chapter 11 bankruptcy protection recently (see Yipes Reborn – Amid Accusations). Christensen says Intel is now considering investing in the new Yipes -- Yipes Enterprise Services Inc. -- because it still thinks the business concept is a good one.

— Peter Heywood, Founding Editor, Light Reading
http://www.lightreading.com
coffeebean 12/4/2012 | 10:05:43 PM
re: Intel Capital 'Ahead $2B'
This story fails to mention how intel capital made this profit, or even a single success. Just a big bottom line. Is this startling profit a result of comms only, or intel capital's total result? How did they manage such a massive return in a declining market?

Perhaps this is the fund's total return (including computing startups).

BobbyMax 12/4/2012 | 10:05:41 PM
re: Intel Capital 'Ahead $2B' Looking at the nature and business of the portfolios company, a profit of $2 Billion seems very high. These number are very high in view of the current business clomate and profit margins. I think a more serious look is needed to evaluate Intel, claioms. Its main line is falling drastically where its income from investment is oprohibitive by all standards.

The profit figure is incredible as Intel acquired a lot of optical companies without any money. Similarly it acquired quite a few neyworking companies, spending over a billion dollars, but did not make a penny.

It appears to me that the company finds it difficult to engage in serious R&Dactivities because of its roots in the low end of the business.

With Telecom sector and very limited growth of other high tech sectors, it is hard to make any projections about the semiconductor industry. Some reports claim at least 20% decline in the profitability of semiconductor industry in the next two years.
optodunce 12/4/2012 | 10:05:08 PM
re: Intel Capital 'Ahead $2B' "Not so. Intel Capital has done just this and made a whopping big profit. "We're ahead by $3 billion to $4 billion," Mark A. Christensen, corporate VP and director of communications sectors, told Light Reading in London today. "Even if we lost everything in our current portfolio [which he values at $1.5 billion], we'd still be $2 billion ahead."

PETER HEYWOOD---YOU HAVE GOT TO BE KIDDING ME!!! How could you post this article when there is not one validation of the numbers that Mr. Christensen mentions! First of all, even though Mr. Christensen is only a Corporate VP and Director of communications, it seems bizarre that he would have a billion dollar swing on how ahead in profit Intel wasGǪI would think at his level he would know whether it was $ 3 billion or $ 4 billion!!!

I find it remarkable that given the climate of corporate mistrust that if this article was to be published that concrete numbers would be used and data backing up those numbers would be included in the articleGǪthis is no time to be lazyGǪto imply that a VC even if it is Intel has made $ 1 billion in profit strictly on its investment in start-ups is disingenuous to be kind!

It seems that given the lack of detail and validation in this article we can only assume that Intel may be a potential investor in Lightreading.com!

Peter this is no time to be Lazy!!! If you are going to promote a story with a headline that Intel is $ 2B ahead, and not include corroborating data, then we can only borrow a line from big bill and ask Gǣ2B or Not 2B! I know the last quip was corny and ridiculous and I should of thought of something more cleaver but,I figured I would give this response the same amount of time you did in your original articleGǪabout 2 minutes of typing!


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