Over the years I’ve heard people point out that nanotechnology isn’t really a technology in the traditional sense. It is instead a means of describing applied science performed at the molecular level. In short, chemistry, physics, engineering, and biology at the molecular level.
An Oct. 9, 2015 article by Kevin Kelleher for Time magazine points that fact out in detail focusing largely on the business end of things (Note: Links have been removed),
Of all the investment fads and manias over the past few decades, none have been as big of a fizzle as the craze for nanotech stocks. Ten years ago, venture capitalists were scrambling for investments, startups with “nano” in their names flourished and even a few nanotech funds launched hoping to track a rising industry.
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Back in 2005, the year when nanotech mania peaked, a gold rush mentality took hold. There were 1,200 nanotech startups worldwide, half of them in the U.S. VCs invested more than $1 billion in nanotech in the first half of the decade. Draper Fisher Jurvetson had nearly a fifth of its portfolio in the nanotech sector, and Steve Jurvetson proclaimed it “the next great technology wave.”
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Ten years on, precious few of the nanotech stocks and venture-backed startups have delivered on their investment promise. Harris & Harris and Arrowhead are both trading at less than a tenth of their respective peaks of the last decade. Invesco liquidated its PowerShares Lux Nanotech ETF in 2014, after it underperformed the S&P 500 for seven of the previous eight years.
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And many of the surviving companies that touted their nanotech credentials or put “nano” in their names now describe themselves as materials companies, or semiconductor companies, or – like Arrowhead – biopharma companies, if they haven’t changed their names entirely.
The rebranding process has been an interesting one to observe. I had Neil Branda (professor at Simon Fraser University [Vancouver, Canada] and executive director of their 4D Labs) explain to me last year (2014) that nanotechnology was a passé term, it is now all about advanced materials.
They’re right and they’re wrong. I think rebranding companies is possible and a good idea. Locally, Pangaea Ventures is now an Advanced Materials venture capitalism company. Coincidentally, Neil Branda’s startup (scroll down about 15% of the way), Switch Materials, is in their portfolio.
However, the term nanotechnology is some 40 years old and represents an enormous social capital investment. While it’s possible it will disappear that won’t be happening for a long, long time.
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