lightreading.com
OCTOBER 05, 2000
Nanovation Bounces Back
Nanovation Technologies Inc. is about to announce a $30 million round of financing and joint
development agreement with Motorola Inc. (NYSE: MOT), demonstrating that it's bouncing back
from setbacks in recent months.
Those setbacks have included the dismissal of its previous CEO, Robert Tatum (see Nanovation's
CEO Gets The Heave-Ho ), refocussing of development work on less challenging materials (see
Nanovation Comes Down to Earth ), and the resignation of its CFO, Melba Chan, announced
earlier this week.
All of these developments reflect a shift away from Nanovation's original plan, which was to go
for an IPO last Spring. That never happened, partly because Nanovation ran into trouble
developing chips in its chosen material, indium phosphide. Nanovation's IPO also got all tangled up
in a law suit relating to back door investments via Stamford International, Inc (see Nanovation
Prepares the Ground for an IPO ).
Under its acting CEO and president, Bob Chaney, Nanovation has now decided to buckle down to
some serious work. "For the next 12 months, we're not going to worry about the IPO," says
Chaney. "The strategy is going to be heads down in product development mode. We'll come up
for air when we've got products and customers to show people."
The latest round of funding will enable Nanovation to hold its breath. "Financially, the company is
in great shape. We've got $45 million in the bank," says Chaney.
Nanovation is still focussing on developing optical chips according to specific customer
requirements. Its first two products will be a customized splitter and a chip that integrates
splitters, switches, taps and couplers on one piece of substrate. These will be based on
silica-on-silicon, similar to the material used by startups such as Kymata Ltd. and Lightwave
Microsystems Corp.. Chaney says samples of these products will be ready by the end of this
quarter and production will start by the end of Q1, 2001.
Motorola's support for Nanovation is significant, in two respects. First, Motorola is putting is
money where its mouth is. It led the recent round of financing, chipping in $10 million of its own
cash.
Second, Motorola's 36-month joint development agreement with Nanovation "emphasizes indium
phosphide" according to Chaney. In other words, Nanovation hasn't given up on developing
optical chips using this rare earth material, which is said to have some unique characteristics. In
particular, active and passive devices can be made in it, facilitating the development of complete
optical systems on a chip.
-- Peter Heywood, international editor, lightreading.com |
