The Art of Company Building: Innovium

Creating a billion-dollar company is the dream of every startup. Innovium, a maker of networking ethernet switches optimized for the cloud founded in 2014, realized that dream when it was acquired by Marvell in August, 2021 with a valuation at close of approx. $1.25 billion. Innovium co-founder and CEO Rajiv Khemani talks about his entrepreneurial journey and his experience working with Lip-Bu Tan, one of the very first investors in the company.

Why did you decide to work with Lip-Bu?

Rajiv: When we started this company in 2014, semiconductor investing was totally out of fashion. Many of the venture firms we approached didn’t really understand what we were trying to do. We had a few VCs who showed interest in Innovium, but none were willing to lead the investment. But Lip-Bu was different. From the moment we first met, he was extremely prepared. He understood our company, had deep knowledge of the market, and had already done reference checks on us, so he was able to make a very rapid decision to invest. Without his leadership and willingness to lead our Series A round, Innovium would never have existed.

How did Lip-But help you solve critical business problems?

Rajiv: Like most startups in Silicon Valley, Innovium had its ups and downs. Lip-Bu not only provided us with encouragement, he helped solve real-world problems. As one of the most connected investors in the semiconductor space, he was able to connect us with new customers and partners. One of our top customers actually said they were comfortable working with us because Lip-Bu was an investor. And because of his connections and strong track record, he was able to help us attract quality co-investors.

What makes Lip-Bu unique?

Rajiv: Lip-Bu is one the busiest people I know, running companies, sitting on multiple boards and continuing to make new investments. But he is extremely available and approachable. Frankly, I’m stunned at how available he is given all the things he is doing. Whenever I call him, he always calls me back within 24 hours. On top of that, he is very
entrepreneur friendly. As we navigated some tough decisions along the way, he was always a reliable sounding board. He offers the perfect balance of coaching without getting stuck in the weeds or getting involved in things he doesn’t need to. The value Lip-Bu provides as a person is much greater than the value of the investment.

Can you tell us about some key moments when Lip-Bu
where made a material difference to your business?

Rajiv: There are many instances. One week after we started the company, we were aggressively sued by a very large competitor. Their goal was to nip us in the bud. Obviously, that was very unsettling. Customers were hesitant to talk to us and employees were reluctant to join us. The company was exposed financially, and the founders were exposed personally. So that was a very uncomfortable position. But the support the Lip-Bu provided during that period was unwavering. That litigation last about 15 months. Ultimately, it was through Lip-Bu’s existing relationship with that large competitor that we were able to come to a mutually agreeable settlement and end the litigation.
Another example was more recent. As you know, the semiconductor industry is going through a serious supply crisis. We ended up in situation where one of our largest suppliers decommitted significantly. That became an existential crisis for our company. Lip-Bu worked his magic with some very senior people in the supply chain and we were able to get additional supply. He made sure we were able to pull ourselves out of this crisis. During
this time, we held daily 9 pm calls with the board over multiple weeks, and Lip-Bu found time to show up for these calls every single night as we figured out how to navigate through these issues. I’m extremely grateful for all that he did.

How would you describe Lip-Bu in three words?

Rajiv: Collaborative, resourceful and a true friend to entrepreneurs.

You’ve known several members of the Walden Catalyst
Ventures team for years. How would you describe the Walden Catalyst team?

Rajiv: Clearly, Walden Catalyst is a very strong team that brings a unique set of capabilities to the table, such as a deep understanding of the semiconductor industry. It’s a team that knows each other well and have worked closely together in the past, which enables them to make quick decisions and pick the winners. Additionally, it’s a team with tremendous industry connections—and those connections are invaluable to startups as they execute throughout their journey.