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March 22, 2005 — NanoOpto Corp. announced closing its Series C funding this morning, the latest in a string of deals completed since January that will conspire to make 2005’s first quarter a very healthy one for nanotechnology funding.
The Somerset, N.J., developer of design methods and nanofabrication technology to make optical components, raised $12 million. New investor First Analysis, a private equity group in Chicago, led the round. Existing investors who participated included Morgenthaler Ventures, two Draper Fisher Jurvetson funds (DFJ Gotham Ventures and New England Ventures), Harris & Harris Group and U.S. Trust’s Excelsior Venture Partners III. The round brings the total raised to date by NanoOpto to $42.3 million.
“I think they’re looking for business models that work,” said Barry Weinbaum, NanoOpto president and chief executive, of venture capitalists as a whole. “Take the nano part out of it. We’ve been shipping products for several months now.”
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Now, he says, the trick is to build up manufacturing capability to meet anticipated demand — hence the fund raising. The company has bulked up from about 20 employees a year ago to 30 today. It recently hired Bruce Nonnemaker as vice president of manufacturing and operations to lead its manufacturing expansion. Weinbaum said NanoOpto anticipates hiring a few more engineers and technicians to staff its fabrication facility at the company’s New Jersey headquarters.
Since the start of the year, a slew of other nanotech companies have announced raising significant venture rounds. In addition to NanoOpto’s announcement, the following companies are among those that have announcing closing on financing this year:
- ApNano Materials Inc. of New York, N.Y., closed on $5 million.
- Nano-Tex LLC of Emeryville, Calif., closed on $35 million.
- Nantero Inc. of Woburn, Mass., closed on $15 million.
- Starfire Systems Inc. of Malta, N.Y., closed on $500,000.
And that doesn’t include non-U.S. nanotech companies, like Oxonica (which announced closing on $4.9 million in February) or microtechnology companies working at the edge of nanotech.
Weinbaum and other experts say the funding suggests that nanotechnology companies are entering a next stage where they can be evaluated by metrics like revenues, manufacturing capacity and book-to-bill ratios.
“What you’re seeing is the companies that have advanced beyond the science project phase,” he said.