Doubling down on Morse Micro’s $140m Series B, led by MegaChips Corporation.

Stoic VC

Australia’s largest semiconductor maker, Morse Micro, has banked a $140 million funding round, backed by Japanese chip giant MegaChips, with a view to using its vast network to turbocharge the manufacture and distribution of its energy efficient, long-range WiFi HaLow chips.

In its series B round Sydney-based Morse Micro, which now employs 150 people across Australia, the United States, China, India and the United Kingdom, has taken $100 million from MegaChips. The rest comes from Blackbird Ventures, Main Sequence Ventures, Clean Energy Finance Corporation, Skip Capital, Uniseed, Stoic, SpringCapital Investment and Malcolm and Lucy Turnbull.

Morse Micro, which refused to reveal its new valuation after the funding, plans to bulk out its global team and double down on selling its Wi-Fi Ha Low chips to large wireless companies that instal them in various “Internet of Things” devices.

These chips can reach 10 times the range of conventional Wi-Fi technology and last many years on a single battery.

They are typically used in smart home devices, such as surveillance cameras, motion sensors and lighting controls in homes, or industrial use, such as in smart door locks, vehicle gates, heating, ventilation, and air conditioning systems and supply chain asset tracking.

Co-founder and chief executive Michael de Nil said the strategic investment by MegaChips would turbocharge Morse Micro’s sales pipelines into Japan and shore up part of its manufacturing needs.

“As well as being a customer, they have very strong experience on the manufacturing side and in quality control,” Mr de Nil said of his new major shareholder and partner.

“And the Japanese market is pretty massive, with the strongest demand from industrial IoT applications that deploy thousands of devices in warehouses which use sensors and actuators.”

MegaChips designs, develops, manufactures and sells “large-scale integrations”. This is the process of embedding thousands of transistors on a single silicon semiconductor microchip.

Listed on the Tokyo stock exchange, MegaChips has a market capitalisation of ¥61.64 billion ($650 million), and booked nearly ¥15 billion in revenue last year.

Earlier this year, Mr de Nil met Megachips executives in Silicon Valley, San Francisco, where a meeting around chip production soon turned serious.

“We weren’t looking to raise at the time, as we’d just done an internal round,” Mr de Nil said.

“But as we got to know each other, we found there was a strategic kind of partnership, and it turned into this very large series B, which gives us a very significant runway.”

The deal will significantly boost the numbers for tech company investment in Australia, which has taken a significant hit since the end of the first quarter of 2022.

More leverage

On Tuesday The Australian Financial Review revealed data showing the amount of capital flowing to Australian start-ups is now consistently down about 50 per cent compared to the same month last year.

However, some tech-related deals have continued to happen, with two new venture capital funds closing investments in recent weeks, in seed-focused RealVC and a $140 million fund for OIF.


Mr de Nil said he expected the MegaChips deal would give it more leverage, in a semiconductor industry under severe strain but dominated by a few large players.

– Australian Financial Review