Fully funded, Nanosys pursues initial product launch by 2006

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July 21, 2003 — Inside the Palo Alto, Calif., offices of nanotechnology startup Nanosys Inc., Calvin Chow posed a question: “What can you do with just one nanowire?”

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It’s hardly hypothetical. Chow, Nanosys’ chief operating officer, was talking about commercializing nanowire technology originally developed by Harvard University chemist Charles Lieber, a Nanosys co-founder. In the future, nanowires could be used in complex electronic devices. But Chow wants to know what can be done with a single nanowire — today.

His answer: biosensors.

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It’s an answer emblematic of the company’s overall approach. (It’s also one of the company’s development programs.) Building a biosensor device, Chow said, would move the company toward more complex applications while simultaneously bringing in revenue.

“We’re looking at the path between where we are today and sometime in the future where you want to have, say, a nanocomputer,” said Stephen Empedocles, director of business development. A nanocomputer may be many years ahead but, he asked, “What are the steps along the way?”

And, more importantly, “What are the products you can produce along those steps?”

Although it will be another couple of years before we know whether the company’s strategy will ultimately work — initial products are slated for 2006 — private investors, corporations and government agencies apparently think it will.

In June, investors ponied up $39 million for a stake in the company. (The round was originally reported as $38 million but that did not include participation from unnamed investors, according to CEO Larry Bock.)

Last year, Nanosys cut a development deal with Matsushita Electric Works to make solar cells for the Asian building materials market. Just last month, Nanosys was awarded Phase 1 of a potential $850,000 Small Business Innovation Research (SBIR) award from the National Science Foundation to further development and commercialization of its nanocomposite solar cell technology — the latest in about $15 million of nonequity government grants and contracts. Nanosys employs about 30 people.

“It tells you a lot in this environment where corporations are not making investments lightly,” said Charles Harris, chief executive of Harris & Harris Group Inc. and an investor in Nanosys. “It tells you a lot about their intellectual property position and about confidence in the management.”

The biosensors effort is one of three programs currently under way at the company’s Palo Alto headquarters and at a research center in Medford, Mass. The other programs, in photovoltaics and macroelectronics (flexible electronics), are similarly geared toward near-term applications that serve as stepping-stones on the road to more complex products in the future.

To accomplish these goals, the company has amassed an intellectual property war chest some 120 patents strong — both internal and licensed — in the field of inorganic semiconductor nanomaterials such as nanowires, nanorods and quantum dots.

According to Bock, these materials can be manufactured more easily than carbon nanotubes, which can be used in similar applications and pose the greatest competition. Bock said the IP surrounding the inorganic technologies was also more centralized — most notably in the labs of University of California, Berkeley chemist Paul Alivisatos and Harvard chemists Charles Lieber and Hongkun Park, all three of whom are scientific founders of the company.

Like biosensors, the company’s solar cell program illustrates how its first generation products will derive more value from material properties than from the processes used to manufacture them.

“A nanocomposite photovoltaic cell, where you literally mix the nanocrystals into a composite material and then coat it on is very straightforward in terms of how you make the device,” Empedocles said. “It relies very heavily on unique characteristics of the material and very lightly on the complexity of the manufacturing process.” The solar product slated for 2006 is a roofing tile with integrated photovoltaic material.

For macroelectronics, the company is looking to leverage processes from one industry and apply them to another — in short, take the methods for generating large rolls of film and use them to manufacture electronic devices with high performance electronics printed on them. The electronic circuitry that powers a laptop’s display is a good example. Today, such electronics are created using expensive semiconductor processes.

Bock appears to have the credentials to pull off this kind of cross-pollination. “He’s one of these people who looks at the research and the resources available and how they can put it all together,” said Lynn Foster said of Bock, whose track record as a biotech entrepreneur includes over a dozen startups, many of which went public. Foster, former director of technology consulting at Larta, a Los Angeles-based business development agency, is director of nanotechnology at Squire Sanders & Dempsey, a Los Angeles law firm.

Although Nanosys is working across a wide variety of applications, Empedocles said the company’s focus on real world products is a constant, and that it serves purposes central to both the company and the industry.

“One, our investors want to see a return in the shortest amount of time possible,” he said. “Two, the world needs to see what nanotechnology is all about and how it affects people.”

In short, nothing would articulate the merits of nanotechnology better than a house with solar cells built into its roof tiles.


Company file: Nanosys Inc.
(last updated July 21, 2003)

Nanosys Inc.

2625 Hanover Street
Palo Alto, CA 94304

Nanosys was founded in 2001 to commercialize inorganic semiconductor nanomaterials such as nanowires, nanorods and quantum dots.

Small tech-related products and services
Nanosys currently has development programs under way in macroelectronics, biosensors and photovoltaics. The company aims to announce products in 2006.


  • Larry Bock: president and chief executive officer
  • Calvin Chow, chief operating officer
  • J. Wallace Parce: chief technology officer
  • Investment history
    In October 2001, Nanosys secured $1.65 million in initial funding. In February 2002, it raised a $15.5 million round, followed by a $39 million round that closed in June 2003. Investors include CDIB BioScience Ventures; UOB Hermes Asia Technology Fund and UOB Venture Technology Investments Ltd managed by UOB Venture Management Pte Ltd.; Healthcare Focus Fund L.P. managed by Arch Venture Partners for the California Public Employees’ Retirement System (CalPERS); ARCH Venture Partners; CW Group; Polaris Venture Partners; Venrock Associates; Prospect Venture Partners; Alexandria Real Estate Equities; Chiao Tung Bank; China Development Industrial Bank (CDIB); Harris & Harris; Lux Capital. Strategic investors include Quanta Computer, SAIC Venture Capital Corporation, Kodak, H.B. Fuller. It has also received government grants from the Defense Advanced Research Projects Administration, Defense Threat Reduction Agency, National Reconnaissance Organization, National Institutes of Health. In June, Nanosys announced a Phase 1 SBIR award from the National Science Foundation.

    Selected strategic partners and customers
    In December 2002 Nanosys signed a development deal with Matsushita Electric Works to develop nanotechnology-based solar cells for the Asian building materials market.

    Selected competitors

  • Nanomix Inc.
  • Carbon Nanotechnologies Inc.
  • C-Sixty Inc.
  • Why they’re in small tech
    “Because we fundamentally believe that the materials and applications we are developing represent the beginning of a new industry that will have a profound impact on virtually all areas of technology and life,” said Stephen Empedocles, director of business development.

    What keeps them up at night
    “The possibility that more people will read Michael Crichton’s book ‘Prey’ than read Small Times, and start believing that this is what nanotechnology is all about,” Empedocles said.

    Recent news

  • Nanosys round shows small tech turning heads in big boardrooms
  • Nanosys licenses Israeli patents
  • Nanosys extends second round to $38 million


  • URL: www.nanosysinc.com
  • Phone: 650-331-2100
  • Fax: 650-331-2101
  • E-mail: [email protected]

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