San Mateo, Calif.-based Tak'Asic develops semiconductors for use in printers, copiers and other devices.

An international syndicate of investors has provided 13-year-old digital imaging startup Tak'Asic Group Inc. of San Mateo, Calif., with a third round of venture capital financing worth $16.25 million.

Israel-based firm Jerusalem Venture Partners joined the investor group and led the new round, which also featured new investor CrossBridge Venture Partners of Japan. Prior investors Doughty Hanson Technology Ventures of London and Sofinnova Partners, SPEF Venture, Innovacom and Ventech of Paris also participated.

This is Tak'Asic's first round since February 2002, when it closed its [Euro]10.8 million ($13.7 million) second round, co-led by Sofinnova and Doughty Hanson. The company closed a [Euro]1.8 million first round in February 2000, featuring Innovacom, Ventech and SPEF Venture.

Tak'Asic used neither a placement agent nor financial adviser for this round, although it retained French investment bank NetsCapital for its second round two years ago. Lior Nuchi of the Silicon Valley office of Bingham McCutchen LLP was Tak'Asic's counsel.

Although Tak'Asic chief executive Doug Goodyear would not give a valuation for the company or say whether it had risen or fallen, he said the company was "pleased with the current valuation."

Tak'Asic is developing system-on-a-chip hardware for use in digital imaging devices, including low-cost color printers, copiers and other imaging peripherals. The company said it hopes to use the new funding for continued development of printers with direct interfaces with digital cameras and mobile phones.

Goodyear said Tak'Asic existed as a service company for its first eight years, but that its three French co-founders developed a fax compression technology that ultimately became a widespread standard. The company's additional advances in image compression prompted its sudden growth in the current decade.

Jerusalem Venture Partners principal Tal Lev said that Doughty Hanson introduced his firm to the investment opportunity. The firm, he added, was already familiar with Tak'Asic chairman Michel Desbard, who had been chief executive of one of the firm's portfolio companies, network processor developer T Sqware Inc. of Santa Clara, Calif. That company, which also shared engineers with Tak'Asic, was acquired by broadband chipmaker GlobeSpan Inc. of Red Bank, N.J. (now GlobespanVirata Inc.), in 1998.

He added that the reach of the multi-national syndicate will increase Tak'Asic's international exposure. "The company itself is already international," Lev said. "It has just established a sales office in Japan, has developers in France and headquarters on the West Coast."

Goodyear said Tak'Asic intended to find large investors with deep knowledge of the semiconductor field, as well as ones with Japanese experience, since most of the company's customer base is in Japan.

"Silicon Valley firms tend not to like companies with international engineering groups," Goodyear said, explaining the lack of U.S. firms that backed Tak'Asic.

Lev said he expects "hypergrowth" in the sector due to the proliferation of digital cameras and other imaging devices.

"Eighty to 90% of photographs are currently printed using a variety of home printing devices," he said, adding that he expects "major changes" among vendors and in the supply chain for digital image printers.

"Our technology currently resides inside of copiers and office-style color page printers," Goodyear explained. "It's also very relevant for sitting within printers for cameras and cell-phones that do image processing outside of PCs." The devices, he added, are expected to connect using USB cables. "We see it as much as a communications device as a printing device."

Tak'Asic is already generating revenues and expects to use most of the funds for sales and international expansion, but will continue to develop products, according to Lev. He said he expects this to be Tak'Asic's last funding round.

Goodyear said Tak'Asic's business plan indicates that the company will reach positive cash flow in 2005.