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When Mahesh Lingareddy graduated in 1997 from Gitam’s Engineering College in Visakhapatnam, the thing to do was to go to work for an IT firm. But Lingareddy, who always wanted to build a product, instead set off to the US to pursue his dream.
After a stint with a start-up and Intel, Lingareddy began to build a firm with a peer from Palestine. The start-up, SoftMachines, which has just entered the revenue-earning phase, is now valued at $700 million-1 billion and has made a name for itself in Silicon Valley and in the world of semiconductors.
It is on the verge of completing a deal to raise $150-300 million as it heads for a likely IPO in 2018. The firm is planning to double its headcount to about 500 from the present strength of 250.
In a ‘stealth’ mode till recently with teams in the US, India and Russia working on chips that can improve computing speeds significantly, SoftMachines demonstrated the designs to the market. The architecture built by the firm is based on the concept of “virtual cores” and “virtual hardware threads.” This new approach enables dynamic allocation and sharing of resources across cores.
Started with an initial investment of $100,000 from the two founders and an equal amount from an angel, it’s been long journey for the teams painstakingly involved in developing the product. But then, isn’t it painful, running a firm without any revenues?
Lingareddy says building a product is a different ball game. “We never had doubts. It is not like starting a software consulting firm where you can bill clients from day one,” he said.
Lingareddy and co-founder, President and CTO Mohammad Abdallah came out with the results of their seven-year product development recently.
“We could convince investors about our dream. We raised $150 million during 2010-14. Investors ranged from sovereign funds to corporates in the semiconductor ecosystem,” he said.
The firm used ingenious methods to hire as it built up its team. “We approached PhDs and sold them our idea. They joined for a small salary,” he said.
Investments Lingareddy said raising funds helped to move up the value chain. “It’s like having 100 per cent of nothing or a small pie of a huge valuation. I prefer the later,” he said. Lingareddy is now trying to build an ecosystem to promote product development in the country.
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