Forbes
Last week, Baltimore-based nanotech firm Pixelligent Technologies closed a funding round of $5.5 million to continue its development and growth. This marks a total of $23 million in equity funding the firm has raised to date, plus another $10 million it’s received in the form of government grants to develop its technology.
Pretty impressive, considering that the company was on its deathbed a few years ago.
Pixelligent was founded in the year 2000 by Gregory Cooper shortly after he received his Ph.D. in Physics. Cooper, who is currently the CTO of the company, was soon joined by two colleagues: Serpil Gonen Williams, a chemist, and Gene Chen, an electrical engineer, both of whom are still with the company.
The original vision of the company was to use its expertise in nanomaterials to develop composites for use in optical lithography, a process used for the manufacture of computer chips. However, the semiconductor business is a tough one, as the company discovered. Despite awards during its incubator phase, its attempts to raise enough money to develop its technology for the market failed.
The combination of this and a failed commercial partnership sent the company into Chapter 11 bankruptcy in March of 2007. One year later, in March of 2008, the Court appointed Craig Bandes as the company’s Chief Restructuring Officer. At the time, Bandes was President and CEO of Global Secure Corp. Prior to that, he had cofounded Focus Technology Consulting. Despite these successes, he didn’t have an easy task ahead of him in rescuing the struggling startup.
“I helped them work through process of reorganization, settling litigation with partner that didn’t work out, and getting control of its IP,” Bandes told me. “As a consultant, I gave the company about a 10-20% chance of survival.”
The company emerged from bankruptcy in April of 2009 with a plan for growth that involved moving away from the semiconductor market and a new President and CEO – Craig Bandes. Bandes credits the successful emergence from bankruptcy to the company’s strong foundation.
“The only thing that didn’t need to be turned around was the technology,” he said.
In May of 2009, just a month after coming out of bankruptcy, Pixelligent closed a $2 million round of equity financing. This was closely followed by an $8.2 million NIST project award in January 2010. With bankruptcy behind them and investment and dollars for development, the next step for the company was finding the right market for its products.
To that end, Bandes told me, the company’s strategy was simply to listen to the market. And in doing so, the company began taking steps to enter the growing LED market.
“Even though LED bulbs pay for themselves in 18-24 months, there’s still a real drive to bring down the price point,” Bandes told me.
That’s where Pixelligent’s nanotechnology comes into play.
One of the major issues in LED lighting is the efficiency factor. LEDs are often encapsulated in silicone, for two reasons. First, it provides protection for the diode. Second, it changes the refraction of the light coming from the LED from its natural bluish hue to the whiter light most people prefer. However, the silicone also sometimes results in the light bouncing back to the diode, which means both that it’s not emitting as much light as it could and also means that it gets hotter, reducing its efficiency and lifespan.
To alleviate this problem, Pixelligent creates small particles of Zirconium Oxide that are 5nm or less in diameter, and disperses them in the silicone itself. They aren’t the first company to try this, but previous efforts resulted in the nanoparticles clumping together, “clouding” the silicone and reducing the efficiency of the LED. This has to do with the manufacturing process involved in creating the nanoparticles in the first place.
“There are two traditional methods for creating nanoparticles,” Dan Russell, Senior VP of Manufacturing and Operations told me. “By crushing bigger particles into small ones or by burning gasses. Neither of these process create perfect shapes and they’re hard to scale.”
By contrast, Pixelligent builds their nanocrystals from the ground up – well, in this case, the liquid up. Using liquid zirconium, they grow crystals by controlling the conditions of the liquid and introducing a different liquid source to change the surface chemistry of the crystals. The process is precise enough that the company can control the size and even shape of the nanocrystals that it grows, which also means it can avoid the clumping issues.
“This is a major enabler for LED companies to improve their cost per lumen equation, which is what matters for wider commercial adoption,” said Russell.
The process is also more scalable than other technologies thanks to the use of the liquid chemistry, too, because the process is similar to other chemical manufacturing processes.
“Our scale is now dependent on customer demand, not the chemical process,” Bandes told me.
And those companies have taken notice. Pixelligent now has nearly 40 customers, primarily in Asia, and the first products using its technology should be on store shelves in 2016. And while in past years the company has been dependent on government research grants, Bandes told me that 2014 is the first year “that we’re becoming more reliant on commercial revenues rather than government contracts.”
Bandes continued. “I don’t think there’s a leading chip manufacturer or silicone materials company that we’re not engaged with. We are emerging as a leader in the LED space. That’s what going to drive us into crossing over from raising investment capital to using revenue to drive our growth.”
Not bad for a company that was in bankruptcy just five years ago.
By Alex Knapp on December 19, 2014