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Optimal+ raises equity from KKR, as it moves into the electronics market

Israeli software company Optimal+ has spent the past decade helping semiconductor companies like Marvell (MRVL) test and improve their chip manufacturing processes. Recently it announced plans to expand into the broader electronics sector, which it hopes to eventually generate the majority of its revenue.

In order to make the move, Optimal+ has raised $42 million in new growth equity funding led by Kohlberg Kravis Roberts & Co. (KKR). Existing shareholders Carmel Ventures and Pitango Venture Capital also participated.

KKR has long history in the chip space, having invested in such companies companies as Marvell, NXP Semiconductors (NXPI) and Avago Technologies (AVGO). Director Lucian Schönefelder says that while some of those deals — namely NXP — faced cyclical challenges, a services business like Optimal+ is much more predictable.

“Optimal+ charges a base subscription fee for the number of testers and then modular subscription fees on top of that,” Schönefelder explains. “The number of testers is infrastructure in the ground, so it doesn’t change overnight. And if you’re a semiconductor company heading into a downturn, you’re not going to abandon something that is helping to improve yields and the efficiency of existing infrastructure.”

Optimal+ CEO Dan Glotter adds that his company’s primary competition is homegrown solutions — something that Intel Corp. (INTC), for example, is known for using, but claims that he’s “seeing a constant trend moving into our solutions.” As for why the company raised new private equity rather than going public, he said he’d prefer to list once some value is evident from Optimal+’s move into the electronics sector.

Neither Glotter nor Schönefelder were willing to discuss the company’s top-line financials or valuation. KKR funded the deal via its balance sheet, and all of the $42 million was primary equity.

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