This was a Shock: Calxeda Shuts Down

Post by
Scott Francis


All the outward signs that were visible to me were that Calxeda was doing well.? Just last year, it raised $55M, for a total investment raise of $100M.


Unfortunately, that wasn't enough, and the company abruptly laid off most of its staff of 120 workers, who were informed on December 19th.? Merry Christmas.? I hate to hear news like this right before the holidays.



Executives at the Austin-based company said the 120 workers were told of the closing Thursday. The company simply ran out of capital during its product development, according to published reports.


Silicon Hills had some additional coverage the following day, December 20th:



?Recent ATI graduate and rock star, Calxeda, will be shutting its doors,? Barchas wrote. ?Investors unexpectedly pulled the plug on the company, which developed a novel architecture to allow low-power ARM chips to drive servers.?
Calxeda, founded in 2008 by Barry Evans, started out at ATI as a dream. Evan?s project also received investment from the Texas Emerging Technology Fund, which allowed him to go from concept to prototype.
Calxeda?s technology garnered widespread praise. In 2012, Massachusetts Institute of Technology named Calxeda one of the 50 most innovative companies in the world. (Google, IBM and Facebook also made the list.) Calxeda also partnered with Hewlett-Packard to test its chips in its servers.


Barchas of ATI wrote:



?Those people just got pink slips,? Barchas wrote. ?That?s awful. So is the fact that Calxeda won?t be the company that exploits the beachhead that they made in the ultra-low power server market.? But Calxeda burned bright. It brought a lot of really talented people (and a lot of money) to Austin,? Barchas wrote. ?I don?t know what?s going to happen to the core IP or to the core team, both of which are massively valuable assets. I?m pretty sure, though, that this won?t be the last really interesting chip architecture company that?s made in Austin.
To Barry and his team, we raise a glass in sorrow, but also in deep appreciation.?


Based on the comment section, Barry Evans (founder and CEO) remains confident in the people of Calxeda and their ability to make an impact at other firms in Austin.? Still, it is a tough time to have a company of this size shut down, and speculation is that they just couldn't close the additional funding necessary to keep going. We'll have to wait for additional reporting to find out why that might be.


The Statesman also ran a story on the subject, including the additional funding:



Calxeda raised a total of $103 million ? including $1 million from the Texas Emerging Technology Fund in 2009
? and thought it had a deal in the works for more, but it fell through, Freund said.? ?We?ve got two good products and they?re starting to see some traction, but they?re simply not generating revenue fast enough to cover the cost of our operations,? he said. ?Which was fine, that was always the plan, but we had planned to infuse additional venture capital and financing into the company to continue our operations.?


All I can say is the Calxeda folks were good neighbors in Austin, and they tackled a great problem area (low-power chip architecture), and if past predicts prologue, we'll see interesting chip startups come out of this group of talented people.? Low power is still going to be in high demand, and I wouldn't be surprised to see someone like Apple or Intel (or even a smaller player) pick up the talent or the technology portfolio.


 


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