It was five months ago that Silicon Valley venture firm Sequoia Capital famously showed its R.I.P Good Times slides to its start-ups. The message? Advertising markets are cracking and e-commerce and spending on technology deteriorating along with the economy, making it harder than ever for start-ups to raise funds. But Nvidia, a U.S. maker of computer graphics cards, announced some welcome news March 10: it is ready to invest from $500,000 to $5 million in individual start-ups in its search for innovative new graphics computing companies.
Nvidia, the inventor of the graphics processing unit (GPU), is launching what it calls a GPU Ventures program, a global initiative to invest in early stage companies leveraging graphics processors for visual and other high-end computing applications. GPUS are increasingly replacing microprocessors (CPUS) and are being used for a whole variety of applications, such as the search for a cure for diseases like Alzheimer’s or charting the surface of Mars. “We want to increase the total available market for GPUS around the world,” says Jeff Herbst, vice-president of business development at Nvidia. “The more disruptive the applications the better.”
Nvidia has already invested in a number of start-ups including Elemental Technologies, Keyhole Corporation, Mental Images, Right Hemisphere and Accelware. Elemental Technologies, which makes transcoding technology, teamed with Nvidia to build a product for Adobe Systems, a software company that pioneered the PDF. Nvidia also provided funding and publicity for Keyhole, which was acquired by Google for Google Earth. And, after providing some initial funding for Berlin-based Mental Images, it eventually bought the whole company, which specializes in rendering and 3D modeling technology for a variety of sectors that require sophisticated images, including the entertainment industry, says Herbst In other cases, Nvidia’s investments attracted venture capitalists to fund the companies.
Nvidia isn’t just handing out cash. It is proposing the kind of “smart money” that start-ups crave, offering its distribution channels and marketing support. The link with Nvidia also raises the profiles of companies. To that end, Nvidia is launching a “GPU Venture Zone” website to showcase innovative applications being developed by these companies.
“We are in inning two of a huge program we intend to support for many years,” says Herbst. For start-ups that is sure to be a welcome alternative to burying their dreams under Sequoia Capital’s R.I.P “good times” tombstone.