Morgan Jones is greedy, according to himself.
The Battery Ventures investor offered up this joking self-slander last week in reference to his firm’s role as sole participant on a $3.5 million Series A funding round for Quantum Leap Packaging Inc., which develops liquid crystal polymer packaging solutions for high-volume electronic and optical components.
Jones doesn’t yet know whether or not his latest portfolio addition will need more private capital, but he clearly prefers that any Series B deal include another Battery-only term sheet.
“When I see an opportunity to change a market this strikingly, of course your competitive juices get flowing and you want to take as much as you can,” says Jones from his firm’s Wellesley, Mass.-based offices. “So, if I had my druthers, we’d be the only firm involved on another deal, but I know for sure that we wouldn’t be the only one interested.”
On first blush, Jones’ greedy optimism seems a bit outdated. Liquid crystal polymers (LCPs) have been a packaging industry mainstay for several years, having been used in everything from mascara applicators to automotive motor fans. The difference, he says, is that LCP technology still hasn’t successfully penetrated the high-volume electronics (i.e., semiconductors) and optical components market.
“There have been a lot of smart people in this market trying to come up with replacements for metal and ceramic packaging in air cavity environments, but it is a tougher problem to solve than it appears because of the technical specs and price points you have to meet,” Jones explains.
Mike Zimmerman, founder and CTO of Quantum Leap, describes his company’s technology this way: “We make these little LCP enclosures that you put components in when you don’t want the device touched by the packaging. This is so that the package doesn’t degrade the device or signal or, in the case of MEMS, where the structure actually moves.”
Quantum Leap has already generated decent revenue, but Zimmerman acknowledges that the company must execute a corporate transformation before biting into any major market share. The first part of this internal shift involves the $3.5 million from Battery, which will help Quantum Leap weaken its ties with Ixion Technologies Inc., a TA Associates portfolio company that has been incubating Quantum Leap since January.
The plan is to first move out of Ixion’s New Bedford, Mass.-based offices, and into new digs 72 miles away in Wilmington, Mass. That is expected to occur later this month, after which Quantum Leap will begin to hire a manufacturing staff of between 15 to 30 employees. The company also expects to internalize its sales and marketing efforts, which so far have been carried out by Ixion. The final hire is expected to occur during the first quarter of next year, when Quantum Leap concludes its CEO search.
Jones says that Quantum Leap will have generated “seven-figure” revenue by year-end. The Series A funding was closed in August, but is being announced today.
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