“Nanotechnology is the right place to invest”
The number 14 billion The amount invested in dollars by the U.S. National Nanotechnology Initiative since 2001. Russia is currently investing a 4 billion sovereign nanotechnology fund focused on acquiring technology ready for manufacturing, while China has committed over 20 billion to nanotechnology initiatives.
What is nanotechnology?Nanotechnology is the set of applications and technologies that use nanostructures and nanoparticles to leverage the change of physical properties occurring at the nanoscale. I agree with the perception that Nanotechnology is in many ways “the next industrial revolution” due to its ability to enable materials, devices, and systems with new molecular properties and functions. What is the role of NanoDimension in this field?NanoDimension is a venture capital firm operating in Zurich, CH and Menlo Park, CA, USA. We exclusively invest in nanotechnology startups. We are a group of passionate scientists and engineers whose original members came out of the EPFL. We are experts in the field of nanotechnology and are able to evaluate companies with the highest probability to scale up their technology and disrupt important markets. We are currently investing our first partnership of €45m and will begin our second chapter shortly. What about returns, what about exits? Is the stock market ready for nanotechnology?The stock market is ready. Amongst others, A123 went public on the Nasdaq in September 2009. In addition to IPOs, the big companies are shopping for breakthrough technology that will give them the edge with next generation product(s). NanoDimension’s portfolio company, Xtellus Inc., was acquired by Oclaro (OCLR) in December of 2009—just 18 months after investment. The stock value of the buying company doubled within 6 months after acquisition providing us with solid early return. When comparing NanoDimension’s performance with the US VC industry’s three key indicators (TVPI, DPI, and RVPI), we are in the top quartile. How large has the field of nanotechnology become? The field is large and growing. The number of high quality deals is increasing significantly. Since our start in 2002, our database has grown to over 6000 companies. In 2010, our team screened over 1,700 companies and diligently reviewed 173 as potential investments. To put these figures in perspective, the 2010 figures are twice those of 2007.Which industrial sectors have the greatest potential for disruptive nanotechnologies and why? Both life science and physical science applications of nanotechnology have tremendous potential to disrupt markets. On the life science side, the use of synthetic nanoparticles within therapeutics and vaccinations attract the most attention from investors. For physical science investments, nanostructured layers for next-generation CMOS chips, nanostructured electrodes for battery designs, and nanopatterned filters for water cleaning are booming. Regardless of sector, the investments with the most upside leverage completely new technological applications, not simply ‘better/cheaper’ revisions.
Do you see the momentum of nanotechnology continuing?Definitely, the momentum has arrived and is continuing to build, as seen by the top CEO’s coming on board. For an entire field to be successful in the market you need three key elements: the smartest scientists, cash, and the best CEOs. In nanotechnology’s case, for the past 30 years, the best scientists have published thousands of articles in the top scientific journals and been rewarded with Nobel Prizes and Millennium Prizes. This created the necessary intellectual property to build up solid companies. Over the last decades, governments have also allocated tens of billions of dollars to nanotechnology development. The best CEO’s are now joining nanotech companies. NanoDimension’s portfolio companies alone have attracted many top CEOs, including the former CTO of Motorola (Dr. Bertrand Cambou), the CEO of Solvay Pharma (Dr. Werner Cautreels), the President of Novellus Japan (Dr. Rao Mulpuri), and the COO and President of Sequus Pharma (Scott Minick). Top CEO’s are coming to nanotechnology for the opportunity to gain substantial equity while making a positive societal impact.And what about its economic impact?Nanotechnology companies require both technical and non-technical workers. Soladigm, NanoDimension’s latest investment, is launching a manufacturing plant of electrochromatic windows that will provide over 300 jobs to a rural town in Mississippi. The same logic is true with many other companies.
How do you see Switzerland in nanotechnology?Switzerland is competitive in research, challenged in commercialization. With decades of investment in programs such as Top Nano21 and Nano-Tera, Switzerland has established itself on the world’s stage as a real pioneer in infrastructure and leader-in-education at the nanoscale. Excellent researchers and expertise are available today in the labs of the CSEM, EMPA, EPFL, ETHZ and other universities. It is important to respect the competitive landscape. Competition is global. Russia is deploying a sovereign fund to upgrade its industrial fabric. China is allocating cash for manufacturing facilities and celebrating its entrepreneurs. The U.S. is flourishing with nanotech startups. Switzerland needs to examine its extensive research base and carve out a niche in nanotech that it can exploit competitively. What should be done in order to transform the nanotechnology potential of Switzerland into economic value? Many efforts are already taking place, but we need to do much more. At the educational level, entrepreneurship should be stimulated and rewarded. Thomas Edsion said, “a failure teaches you that something can’t be done … that way.”. At the startup level, entrepreneurs need to know their market before designing a prototype that nobody wants to buy. They must be prepared to go where their potential customers are located and be willing to engage talent from around the world to form the best team. At the financial level, Switzerland needs to allocate funding to attract entrepreneurs.
Heavy weights California’s Schwarzenegger and Russia’s Medvedev see nanotechnologies as a path toward the future for their industries.