Centillium Jacks Up $38M Third Round

Capitalizing on the breadth of interest in digital subscriber line (DSL) technology, Centillium Technology Corp. of Fremont, Calif., raised $38 million in its third round.

Integral Capital Partners of Menlo Park, Calif., led the new investor group that also included General Motors Investment Management, GE Equity Capital, Goldman, Sachs Group, J&W Seligman & Co., Velocity Capital Management, Creative Technology/Creative Labs and Lehman Brothers Inc.

The company’s previous venture investors – Walden International Investment Group, U.S. Venture Partners, Vertex Management and Korea Technology Bank – also participated in what Centillium Chief Executive Travis White said was likely the company’s last private equity round.

Lehman Brothers’ private equity group was the exclusive placement agent on the transaction.

“Centillium has broken the code on the price value package that makes DSL a real attractive proposition,” said Roger McNamee, a general partner at Integral Capital.

The company developed a two-chip solution for both the central premises equipment and central office markets. Centillium developed the solution, which offers increased port density with a low power outtake, as a solution to the ongoing port density trouble encountered by telecommunications companies in central offices.

“This is powerful for these companies because it allows them to plug it into existing planes and linecards,” White said.

The chip-set fits into a smaller form, permitting as many as eight ports in the same space that previously housed a maximum of two. In addition, the solution permits both voice and “always-on” data to travel over the same line, all the while taking less power than most companies budget.

White said proceeds from the offering would be set aside for general working capital needs to enable the company to execute its plan more quickly. Along those lines, the funds will also provide Centillium with the flexibility to acquire other companies and expand beyond DSL service.

“We will continue to leapfrog ourselves, looking into full-rate service, voice-over IP and other areas,” White said.