Nanosys Raises $40 Million After Pulling IPO

LONDON — Nanosys Inc., a nanotechnology startup which cancelled an initial public offering of shares in 2004, has raised approximately $40 million in a private equity financing round.

In a statement announcing the investment Nanosys (Palo Alto, Calif.) did not discuss why it had opted for a venture capital round rather than a repeated attempt at an IPO, but said it would use the money raised to fund development and manufacturing scale-up of products that incorporate its proprietary, inorganic nanostructures.

The venture capital round was led by El Dorado Ventures and includes new investors Masters Capital, Medtronic Inc., Wasatch Advisors, and others. Existing investors including Alexandria Equities, ARCH Venture Partners, CDIB BioScience Ventures, CW Group, Harris & Harris Group Inc., In-Q-Tel, Intel Capital, H.B. Fuller Company, Lux Capital, Polaris Venture Partners, Prospect Venture Partners, UOB Hermes Asia Technology Fund, and Venrock Associates participated in the round.

Nanosys claims that its nanostructures could be used in a wide variety of applications from solar panels, flexible screens to dense computer memory. The company announced it had agreed to work with Intel Corp. to investigate future memory systems in January 2004 and Intel Capital took part in the company's $38 million second round, which closed in June 2003.

However, the company was forced to cancel a planned IPO which had been scheduled to raise about $100 million due to “adverse market conditions” (see Aug. 4, 2004, story). Nanosys was included on the first EE Times list of emerging startups published in April 2004.

Nanosys’ current product development programs include chemical analysis chips for pharmaceutical drug research, fuel cells for portable electronics, nanostructures for displays and phased array antennas, non-volatile memory for electronic devices, and solid state lighting products, the company said.

“The overwhelming response and success of this financing demonstrates a strong validation of our approach and progress towards developing and commercializing nanotechnology-enabled products,” said Calvin Chow, Nanosys' chief executive officer, in a statement.