Moov Technologies, a virtual platform for buying and selling used semiconductor manufacturing equipment, has been busy during the pandemic.
The company finds itself in the center of a global shortage of computer chips, it just raised $2 million in venture funding from a group that included Mark Cuban, and co-founder and CEO Steven Zhou says that the company is relocating its headquarters from San Francisco to Arizona.
“The first and obvious elephant in the room to address is that the cost of living is much more favorable in Arizona, meaning the dollar goes further in Arizona compared to the San Francisco Bay area,” he said in an interview. “And the quality of talent is superb out there. And sometimes, very oftentimes, very comparable to San Francisco and all the other major tech hubs in the nation.”
Zhou said they originally called the Arizona office “HQ Two” but during the pandemic it became clear that the Grand Canyon State would be the best place to grow the company.
Last March, when the company was just opening its doors in Arizona, it had seven employees in the state. Now, Zhou said that 20 of the company’s 25 full-time employees are here.
The company was based at Workuity in Chandler, but has since moved to the Acacia Court business center at 950 W. Elliot Road in Tempe. Zhou said they’ll likely outgrow that space in the coming months since they’re looking to double or triple the Arizona headcount by the end of the year.
“Battle for chips”
Semiconductor computer chips are found in all manner of electronic devices and when the pandemic took hold last year, it changed consumer buying behavior so drastically that chip producers had to shift production.
Even now, nearly a year since pandemic protocol took over in America, the global supply of computer chips is jammed up and may be so for the rest of the year.
Moov facilitates the trade of used semiconductor manufacturing equipment between companies. On Wednesday, the company’s website had more than 16,000 active listings of fabrication, test and other manufacturing units.
Chip fabrication facilities, simply called fabs, are under near-constant redevelopment to ensure that the most advanced chips are being produced. That churn of production means that many large companies discard machinery well before its 15-to-20-year life span is up.
“Moov’s role is to directly alleviate the shortage by just increasing and injecting hidden liquidity and supply into the market,” Zhou said. “There is a battle for chips, and that battle for chips means there’s a battle for equipment.”
As technology like 5G, AI and quantum computing advance, so too must internal components that enable more complex functions. Zhou said Moov users range from R&D labs doing small proof of concept production to the international, public companies driving global output.
“More and more companies are turning to Moov and the second-hand market to try to find equipment to increase the production of chips, so we’re directly caught in the white hot center, in a very strategic position in the chip shortage to help alleviate it.”
In the money
In January 2020, Moov emerged from stealth and announced a $2.4 million seed round led by NFX, a venture capital group based in San Francisco.
Last week, the company announced an additional $2 million investment led by NFX with participation from Nat Turner and Zach Weinberg, co-founders of Flatiron Health and Mark Cuban, the owner of the Dallas Mavericks and cast member of the TV show Shark Tank.
In a written statement accompanying the announcement of Moov’s latest funding, Cuban said the company is in position to play an essential part of the industry’s future.
“The semiconductor manufacturing industry is notoriously difficult for small and midsize companies to navigate due to capital requirements, rigid supply chains, and fast-cycling markets,” he said.
“While the global Covid pandemic created new challenges and subsequent opportunities for traditional chip manufacturers, we saw small and medium-size businesses struggle to adapt to the new market demand. Marketplaces like Moov are changing this dynamic by creating new opportunities for SMBs to compete in a highly antiquated industry, in a cheaper, faster, and all around more efficient way. This is one of the many reasons why we believe that Moov is well positioned to be an essential part of the industry in the future.”
Zhou said the latest round of funding came with a significantly higher valuation than the previous round and they did not have to cede a significant portion ownership in the process.
“It wasn’t really about the capital, it was just more so having very strategic individuals having some skin in the game, meeting with them regularly and just kind of building the company together.”