VCs spent a fortune on nanotechnology investments early in the decade, and have since generated very little in the way of returns. But there may be hope for ROI in the near term, if one considers a rise in the introduction of nanotech-enabled products as a positive indicator for future exits.
According to a new report from Pew Charitable Trusts’ Project on Emerging Technologies (PEN), over 1,000 nanotechnology-enabled products have been made available to consumers around the world. Recent updates to the inventory list include non-stick cookware, lighter, stronger tennis racquets, and wearable sensors that monitor posture. (See full list here)
It’s apparently a big increase from just a few years ago. PEN Director David Rejeski says that when the inventory list launched in March, 2006, they found only 212 products. If the introduction of new products continues at the present rate, he predicts, the number of products listed in the inventory will reach close to 1,600 within the next two years.
Health and fitness items continue to dominate the PEN inventory, representing 60 percent of products listed. More products are based on nanoscale silver—used for its antimicrobial properties—than any other nanomaterial.
It’s unclear to what extent the trend helps VCs – who by this point have recognized that nano investments, like practically everything else these days, will take longer to reach potential fruition than anyone initially expected.
Poking through the Thomson Reuters database, I didn’t see a prominent exit or shutdown in the nanotech space this year. However, there were a couple not-so-promising developments involving investments in companies working on microelectromechanical systems (MEMS) technologies.
Nanochip, a Fremont, Calif.-based maker of memory circuits, shut its doors in May after raising $51 million in venture funding. Backers included Intel Capital, JK&B Capital, New Enterprise Associates and Microsoft.
The only M&A deal of the past year I could find was a financial loser for VCs. Axsun Technologies, a Billerica, Mass.-based developer of MEMS-based micro-optical spectrometers and optical channel monitors, was acquired by Volvano Corp., a medical device company, in December for $21.5 million. Previously, Axsun had raised $154 million from backers including VantagePoint Venture Partners, Prism VentureWorks, Bowman Capital, Agilent Ventures, and Millennium Technology Ventures.