Berkeley startup brings in $20 million

0 Comments | Oakland Tribune, Mar 18, 2004 | by Alec Rosenberg, BUSINESS WRITER

BERKELEY -- A Berkeley startup that uses fingerprint sensing technology to secure access to notebooks, cell phones and other applications said Wednesday that it raised $20 million in its first round of venture-capital financing.

The firm, UPEK, is a spinoff of semiconductor company STMicroelectronics' fingerprint biometrics business, formerly known as TouchChip. STMicroelectronics remains the primary supplier of silicon and components to UPEK and is a significant shareholder in the firm.

"The team and I are excited to have the opportunity to establish UPEK as an independent company," said Chief Executive Alan Kramer, who directed STMicroelectronics' fingerprint business unit since its start in 1999.

UPEK's venture-capital investors include Sofinnova Ventures of San Francisco, Sofinnova Partners of France and Diamondhead Ventures of Menlo Park.

Privately held UPEK hopes to break even by mid-2005, which would require annual revenue of $20 million to $30 million, Kramer said. UPEK has 50 employees, including 15 in the U.S. and 30 in the Czech Republic.

UPEK's silicon-based fingerprint sensing technology is used in about 100,000 notebooks a year, led by MPC Computers. IBM will start shipping notebooks with UPEK technology later this year, Kramer said.

UPEK is beginning to use its technology in cell phones, a new application with long-term potential, Kramer said.

UPEK's other customers include the government of Malaysia, whose national ID cards use its technology, and Indivos, an Oakland biometrics company that was bought last year by San Francisco's Solidus Networks and renamed Pay By Touch.

UPEK's technology also helps provide access to safes and front doors. "Anywhere you use a lock, you can replace that with biometrics," Kramer said.

Biometrics involves identifying people through their physical traits such as irises, fingerprints or voice patterns. The fragmented biometrics market was estimated to be $719 million in 2003 and is projected to grow to $4.6 billion in 2008, according to the International Biometric Group.