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 What Would Joe Do?
Peggy Aycinena
Peggy Aycinena
Peggy Aycinena is a freelance journalist and Editor of EDA Confidential at www.aycinena.com. She can be reached at peggy at aycinena dot com.

Jasper DA: What the Future Holds

 
December 12th, 2013 by Peggy Aycinena

At a recent tech conference in Silicon Valley, I had a chat with a long-time EDA player; let’s call him Elmer. The conversation came around to Jasper Design Automation and conjectures as to what’s ahead for the company. I recounted a small compare and contrast.

At the 2008 February EDAC CEO Forecast Panel, Jasper CEO Kathryn Kranen was on stage along with Synopsys CEO Aart de Geus, Mentor CEO Wally Rhines, and then-Cadence CEO Mike Fister. During the panel discussion, Kranen criticized the Big EDA companies on the panel for their ‘all you can eat’ business strategies – the big companies providing less-than-best-in-class point tools for free to customers who purchased their anchor products, which Kranen said made it nearly impossible for the smaller companies to compete.

Yet by February 2011, at the same annual EDAC CEO event, it seemed that Kranen’s attitude towards the Big EDA players had changed. Though not on the 2011 panel, conversation with Kranen that evening included no criticism of the Big Companies, but instead a spirited defense of collegiality within the industry and the need for companies to cooperate.

After hearing my observations comparing 2008 with 2011, Elmer responded with several of his own. He said he believes that in 2008 Jasper was still hoping to grow bigger and go IPO, but by 2011 the exit strategy had evolved to one of acquisition. He argued that by 2011, Kranen needed to establish and maintain cordial relations with the Big EDA companies, which is why there seemed to be a change in attitude.

As far as going IPO, Elmer said I needed to look at the lead VC on the Board of Directors for Jasper, Lucio Lanza. He said if you look at Lanza’s track record shepherding companies from founding through exit, it’s the rarity for such a company to go public. In Elmer’s opinion, Lanza prefers to groom companies for acquisition, not IPO. Jasper is ripe for acquisition, Elmer believes, and we should expect to see such a move happen sooner rather than than later.

I have to say I was surprised by Elmer’s adamant opinions: Jasper has put out a lot of muscular vibes over the last several years, including news of an additional $7 million in funding in 2011 and several patent announcements in 2012. In 2013, it’s true, the news has been more about partnering and less about infusions of capital or new patents, but does that point to an acquisition in the near future? It’s just a matter of time, according to Elmer, because Jasper is strong and would be a positive addition to one of the Big EDA guys.

In the meantime, Jasper’s Kranen took on the role of EDAC Chair in 2012. Nonetheless, she did not appear on the panel for the 2013 CEO Forecast event in March. Perhaps that’s not surprising considering that EDAC always puts the Big Company CEOs on stage each year – these days that translates to Synopsys, Mentor, Cadence and ARM – and just one small company. Last year it was Gradient; this year it was Nimbic.

I’m hoping that in 2014 EDAC will put Kathryn Kranen back on the panel. Surely it’s Jasper’s turn and a courtesy owed Kranen for her leadership of EDAC. If that happens, I’m also hoping that both Elmer and I will be in the audience. Afterwards, I’ll be sure to track him down to hear what he’s learned by studying the repartee between Kranen and the other panelists.

Perhaps therein will be a hint as to which of the Big Guys will be acquiring Jasper. I’m not as confident as Elmer about all of this, but I can’t prove the future, only the past, so we’ll all have to wait it out together to see what the future holds for Jasper DA, in the sooner or the later.


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2 Responses to “Jasper DA: What the Future Holds”

  1. Oz Levia Oz Levia says:

    Hi Peggy,
    Thank you for your recent post about Jasper. Jasper today is the most successful private EDA company. We are not the biggest, but considering our annual revenue, our sustainable growth rate and consistent profitability we are indeed unique. Our financial success is built on our superior technology and innovative business model.

    It is gratifying to know you have followed Jasper for so long. 2008 now looks like another era. I do not doubt your data about the two encounters with Kathryn, but I wanted to make two points. First, there is no contradiction between criticizing the BIG three for their business practices and at the same time demanding more cooperative approach. All-you-can-eat deals can work to diminish value and discourage investment in EDA. At the same time customers demand and deserve cooperation between competitors for the creation and improvement of design and verification flows. Second, I think that what you saw was indicative of the changing status of Jasper. In 2007 and 2008 Jasper was yet unsuccessful in competing against the big three, partly because of the cited business practices. In 2011, and today, Jasper’s technology and products are clearly the winners. Our success and broader adoption, in turn, is leading customers to ask for better flows and integration with other tools.

    I can’t resist: “Elmer” is feeding you FUD(d). Your source clearly does not have his facts straight, so please allow me to offer these corrections. It is important to note that Jasper’s board includes seven members. You can see more details at: http://jasper-da.com/company/board-directors. Jasper’s “lead VCs” in terms of investment are Mike Schuh of Foundation Capital and Theresia Gouw of Accel Partners, members of the Jasper board since 2003 and 2004 respectively. Each of our board members has made a valuable contribution to the strategy and finances of the company over the years. Lucio Lanza joined the Jasper board as an outside director in late 2010, and has since taken a small position. His experience with publicly-traded companies and IPOs is not “a rarity”. Lucio is currently chairman of the board of PDF Solutions, Inc. (Nasdaq PDFS). He was an early investor in 1995 and shepherded PDF through their IPO in 2000. PDF’s stock has performed extremely well, up more than 10x over the past five years, and up 65% in 2013 alone. Lucio was also chairman of the board of Artisan Components through their IPO in 2000 and their subsequent $1B acquisition by ARM in 2004. Lucio served on the ARM Ltd. board after the acquisition of Artisan, until May of 2010. Lucio is also a general partner in Radnorwood Capital LLC, an investor in public technology companies. And by the way, we did not raise capital in 2011. Elmer should call us – I will be glad to share accurate information.

    To the question of what the future holds for Jasper, I would prefer only to state the facts. We are profitable, growing fast, and have a very healthy cash balance. The top semiconductor, IP, and systems companies are major customers of Jasper.

    Best regards,
    Oz Levia
    VP of Marketing & Business Development and Corporate Counsel

    • Hi Oz,

      Thank you for your detailed response to my blog, to which I will offer several comments. Elmer is a real person, admires Jasper, and has concluded as a result that the company is an attractive target for acquisition. That attitude has nothing to do with FUD. It wasn’t FUD that caused Cadence to acquire Tensilica earlier this year for $350 million. As far as winning in the face of all-you-can-eat competition from the Big EDA companies, Jasper is a privately held company so proving that it’s the winner would be difficult — particularly when even the Big EDA companies, the publicly traded ones, are often unable to provide a complete list of customers because some customers are unwilling to offer testimonials.

      With regards to Lucio Lanza, after my conversation with Elmer, I myself looked closely at the page on the Jasper website that lists the board members. The names are not in alphabetical order, so it’s not surprising that Elmer concluded, and it seemed logical, that the first names on the list carry the most weight. After CEO Kranen, that would be Lanza. If Schuh and Gouw are the “lead VCs”, is it then appropriate to examine their inclinations towards taking companies public to hazard a guess about Jasper’s future? Schuh has been associated with Cadence and Netflix and Eloquent, and all of those organizations went public. Is an IPO for Jasper therefore in the works?

      Meanwhile, I did not say in the blog that Lanza has never taken a company public. His leadership at PDF is well known, but taking a company public and being involved with public companies are two different things. Also important to note that PDF is not the only EDAC member whose stock valuation has shown great growth in recent years. Mentor is up 45% over the last 12 months alone. In fact, all of the public EDA companies have shown significant recovery since the 2008 downturn.

      Having said all of this, it continues to be good to hear that Jasper is doing well. The company’s leadership has a lot to be proud of, and nothing in my blog suggested otherwise. However, Elmer’s comment included in the blog that a $7 million round took place in 2011 was indeed incorrect. If I had checked, I would have seen the correct year was 2009.

      Thanks, Peggy

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