Over 2000 nanotechnology businesses?

Nanowerk has announced a new, free feature: their Nanotechnology Company Directory. From the July 1, 2010 news item,

At the latest count, over 2100 companies from 48 countries are involved in nanotechnology research, manufacturing or applications – a number that keeps growing at a considerable pace.

With more than 1100 companies, the U.S. is home to roughly half of all nanotechnology firms. 670 companies are in Europe, 230 in Asia and 210 elsewhere in the world. Within Europe, Germany is represented with 211 companies, followed by the U.K. with 146 companies.

Over 270 companies are involved in the manufacture of raw materials such as nanoparticles, nanofibers and -wires, carbon nanotubes, or quantum dots. More than 340 companies are active in life sciences and pharmaceutical fields. The vast majority with well over half of all companies are involved in manufacturing instruments, devices, or advanced materials and components.

The news item goes on to provide a definition for what constitutes a nanotechnology company which is timely in light of Dexter Johnson’s June 30, 2010 posting (What Is a Nanotechnology Company Anyway?) at Nanoclast,

I stopped for a moment after reading [in an investment notice he’d received] this term “nanotechnology company” to consider what might actually constitute such a thing. Is Toyota a nanotechnology company as some nanotechnology stock indices have claimed? Is IBM a nanotechnology company because they are doing research into using graphene and carbon nanotubes in electronics? How about all the instrumentation and microscopy companies that give us the tools to see and to work on the nanometer and angstrom scale, are they nanotechnology companies? What about the flood of nanomaterials companies that started making carbon nanotubes in their basements that were going to revolutionize industry?

Despite figures ranging from one to three trillion dollars being dangled in front of people’s faces for the last 10 years, it doesn’t seem to have attracted the level of investment that would really make a difference in advancing the commercial aspirations of nanotechnologies if the recent PCAST meeting is any indication.

So the definition has an impact since entrepreneurs need to attract investment and, as  more than one of the participants in the recent PCAST meeting noted, moving the discoveries from the laboratory to the market place is a labourious process where there is a significant dearth of investment interest for a phase described as the ‘valley of death’ or, as one participant termed it, the ‘lab gap’. (My post about that particular PCAST meeting ‘The Golden Triangle workshop’  is here.)

The same day Nanowerk announced its new nanotechnology company directory, Christine Peterson at the Foresight Institute posted an item about a venture capital group known for investing in nanotech and microsystems,

Small investors who want to invest in nanotech startups have for years turned to publicly-held venture group Harris & Harris Group, which has focused on private companies in nanotech and microsystems.

With the economy down, and initial public offerings (IPOs) more rare, this strategy is changing.

Peterson is commenting on a Wall Street Journal blog posting by Brian Gormley,

In a June 28 letter to shareholders, Chief Executive [of Harris & Harris Group] Douglas Jamison said many of its private holdings are maturely nicely. Even so, volatility and risk aversion in the public markets are making it difficult for these companies [nanotech and microsystems] to go public.

Although the firm plans to continue investing in private companies, “We currently do not plan to make an initial equity investment in a private company until we get increased visibility into the timing of liquidity for our privately held portfolio,” Jamison wrote in the letter.

The firm, which has 31 private investments in its portfolio, expects to gain such visibility later this year. Jamison was not available for comment Monday.

“With the lengthening time between investment and return on investment in private venture capital-backed companies, we need to find a way to generate returns with greater frequency,” Jamison said in the letter.

“As a public company, we should not count on investors to wait five years between liquidity events. We will seek to position our investments so that we can demonstrate positive returns on investments on an annual basis.”

The valley of death or lab gap seems to be getting wider while venture capitalists who do know the industry pull back. Meanwhile, a standard investor is likely to experience confusion about what the term nanotechnology company means and just how much that ‘market’ is liable to worth.

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