Chipmaker Stretch raises $15m in funding

SUNNYVALE, Calif.--Stretch, a manufacturer of software configurable processors, including chips that serve as the guts for H.264 compatible DVRs and cameras, announced in January it has raised an additional $15 million in Series B funding. The round was co-led by Worldview Technology Partners, Oak Investment Partners, and Menlo Ventures, who have previously invested in the company, a total that now stands at $101 million.

“These are top-tier Silicon Valley venture capitalists,” said Bob Beachler, Stretch vice president of marketing. “They're not stupid people, and they're looking very hard at all their portfolio companies.”

What allowed them to be bullish on Stretch, he said, “is the bet we made two years ago when we said we'd apply our technology to video surveillance, which is not recession-proof, as we're definitely seeing, but probably impacted less than other electronics like cell phones or wireless base stations - consumer electronics in general. In hindsight, that makes us look pretty good.”

Howerver, he said, “what really sealed the deal for us was we actually secured design wins; we have customers moving into production, including Matrox, Lanner, and a lot we can't disclose.”

Beachler said the commitment to H.264 was also a factor contributing to growth. He called H.264 becoming the accepted compression standard a “foregone conclusion.”

“I don't know of anybody that's designing a new video surveillance product that isn't H.264,” he said. Next up is the H.264 SVC (scalable video codec), which will allow a single stream with multiple resolutions and frame rates.

“That will be the next de facto standard people will be using,” he predicted.

As a chip-maker, Stretch has a broad view of the surveillance market, and as the company has products in both DVRs and IP cameras, it sees both sides of the analog-IP debate, Beachler said.

“My personal belief is that, cost being such an issue, it may attenuate the adoption of IP network cameras,” he said. “You can talk about return on investment, but apples to apples, using an analog camera and a DVR that's networked is more cost-effective, versus IP cameras, and a switch, and an NVR storage system.”

“My business will be primarily DVRs in the near future.”