AGOURA HILLS, Calif., Dec 5 (LocalBusiness.com) -- Internet Machines Corp. has formed a strategic partnership with New York investment bank Morgan Stanley Dean Witter that has also brought another infusion of cash to the young fabless chip maker.

Agoura Hills, Calif.-based Internet Machines would not disclose the amount of the investment. The company is backed with a Series A round of $8.2 million and a Series B round in September of $30 million. In all, the company has raised more than $40 million.

According to Chris Hoogenboom, chairman, president and CEO of Internet Machines, since 1980, Morgan Stanley has created $138 billion in market value through the IPOs it has backed in the semiconductor business.

As part of the company's long term strategic planning, Hoogenboom said Internet Machines was looking for an investor that can provide more than just cash.

"Morgan Stanley has a very long track record in picking winners and taking them public," Hoogenboom told LocalBusiness.com.

Internet Machines designs chips that will be used in routers and switches along the Internet and is aiming the company to be the outsourcing department for other businesses that don't have the time to develop their own chips.

Founded in January 2000, the company hopes to start taking revenue by 2001.

Other investors in Internet Machines include Redpoint Ventures, based in Menlo Park, Calif. and Meritech Capital Partners of Palo Alto, Calif.

As to the venture market in general, Hoogenboom said investors are getting more picky.

"The deal sizes are getting larger" but there are fewer deals, Hoogenboom said.