Another $1 million fell into the hands of carbon nanotube maker SouthWest NanoTechnologies Inc. (SWNT) of Norman, Okla., last week. A $300,000 chunk of that came from an unnamed local investor, while the rest is the second piece of an ongoing NASA research grant.
The funding will be tacked on to the company’s Series A round, says Mike Moradi, co-founder and vice president of marketing.
While fund-raising has been on and off, dating back to the company’s birth last January, SWNT and strategic partner ConocoPhillips have meanwhile defined the market for its single-walled nanotubes.
“Last year at this time the question was whether the market for nanotubes would be substantial, and if so, would it be substantial in the three to five-year time frame that interests venture capitalists?” Moradi says.
Now, based on the inquiries the company has had for nanotubes, Moradi says the market is there.
“The timing is still suspect, but we’re seeing all the right signs to propel this forward,” he says.
Nanotubes are tiny structures with a long list of applications for the automotive, electronics, energy and manufacturing industries. SWNT’s nanotubes can be used to dissipate heat in flat-panel displays, and as electrical and thermal additives for coatings in NASA’s aerospace programs. The company is working with Applied Nanotech Inc. to develop and manufacture nanotubes for fuel cells and passive electronic components.
SWNT is a University of Oklahoma spinout, based on the research of Daniel Resasco, a chemical engineering professor. The University of Oklahoma controls 47% of the company’s outstanding equity, while Dallas-based energy giant ConocoPhillips owns 21%.
ConocoPhillips also holds two board seats and has a technology partnership with the startup. ConocoPhillips would not disclose the value of its equity stake. Individual investors control the remainder of the shares.
When the company got off the ground last January, SWNT had enough cash on hand to finance its operations through the end of that year. Its balance sheet included a $70,000 NASA research grant, funds from the National Science Foundation, the Oklahoma Technology Council, plus $300,000 from the Oklahoma Center for the Advancement of Science and Technology. It also received funding from the U.S. Department of Energy, which backed Resasco’s research at the University of Oklahoma.
Its ongoing federal grants will continue to fund research and development efforts, while its team continues to address manufacturing questions – how to make the materials useful and functional for potential customers, Moradi says. The company closed its first sale in July.