Photonic Materials secures #8 million funding

Investee Company – Photonic Materials Ltd (PML)

Investee Company Business Type – Develops and manufactures novel crystals

Type of Financing – Early stage

Equity Providers – 3i, Royal Bank Ventures, Scottish Equity Partners, Intel Capital

Equity Leader (Individual) – Chris Hodges, 3i

Debt Providers – N/A

Debt Type – N/A

Debt Leader (Individual) – N/A

Equity Amount – £8 million

Total Deal Value – £10.5 million

Other Advisors – N/A

Comments – Bellshill-based optical crystals company, Photonic Materials Ltd has successfully raised £8 million in a second round of equity funding. 3i led the round in which they were joined by other previous investors Scottish Equity Partners and Intel Capital. Royal Bank Ventures also invested in the round as a new investor to the company, contributing £3 million of the total. Photonic Materials Ltd has also secured a regional selective assistance grant worth £2.5 million through the Scottish Executive.

In what Photonic Materials are calling ‘one of Scotland’s biggest fundraising successes of 2001’, the company is looking to use the £8 million in new equity to invest further in process and new product development, towards gearing up for substantial manufacturing at a new facility and to facilitate a recruitment programme targeted at the creation of quality jobs over the next three years.

Formed in July 1998, the company secured seed funding of £650,000 in January 1999, £150,000 of which came from the Scottish Technology Fund and £100,000 was provided by entrepreneur and current Chairman of New Focus Corp, Milton Chang.

In July 2000, the company secured £3 million in a first round of venture capital backed financing which again included current backers 3i, Intel Capital and Scottish Equity Partners.

Photonic Materials develops and manufactures novel crystals for use in a range of applications including next generation fibre-optic telecommunications. By utilising a differentiated scientific approach to crystal growth process development, the company aims to deliver consistently higher quality crystal products. The concept is consistent with the increasingly important role played by crystals in enabling advanced fibre optic networks, where they are used in several passive optical components that manage and route light within the network.

Dr John Nicholls, Chief Executive of Photonic Materials said: “Despite the current slow-down on development of fibre optic networks, this is the ideal time to achieve further differentiation and provide greater value-add for our partners by investing in new technology based solutions that will help build and operate faster, more efficient telecommunication networks.”

The investment round follows a recent raising of £7.75 million in technology funds for the Glasgow University spin out, Intense Photonics.