Cisco, Dell invest in Internet chip firm Scenix

Scenix, a provider of communications software and controllers, has secured a $42.1 million equity investment from Cisco, Dell and others.

JaoTech Ventures, MSD Capital, Nohau and a half dozen other companies also contributed funding, which privately-held Scenix will use to add manufacturing facilities, increase research and development, and boost sales and marketing efforts.

Mountain View, Calif.-based Scenix supplies embedded Internet chips and software to OEMs, original equipment manufacturers, for use in consumer and other electronic devices, such as gaming consoles and digital wireless microphones). Scenix's technology, for example, is used in the Sony PlayStation.

Scenix is trying to carve out a niche in the embedded systems market, enabling a wide range of consumer and business devices to communicate over the Internet.

Market researcher Cahners In-Stat estimated that embedded system makers shipped 4.9 billion units last year. The researcher estimates that figure will reach 7.3 billion units annually in 2002.

As of December, Scenix had shipped just over 1 million units of its main product, the SX Series communications controller. Since Scenix is privately held, it does not disclose financial results.

Neither Cisco's nor Dell's support for Scenix is surprising, given both companies' market positions. Cisco has been on an Internet hardware buying and investing spree, this month picking up an optical networking firm and a switch maker, among others.

Dell has been aggressive in backing up-and-comers, which often includes seeding its systems or an outright buying commitment. The company has also upped its investment plans in other companies. On April 5, the Round Rock, Texas PC maker recast itself as an Internet infrastructure provider.

Scenix did not disclose each company's stake. Other investors include FleetBoston Robertson Stephens, Kistler Associates and Lantronix.