STIRRINGS of life in the technology funding sector appear to be re-emerging, with two small Scottish firms announcing deals yesterday worth a combined (pounds) 4.75m.
In a surprise boost for the Scottish opto-electronics sector, Photonic Materials raised (pounds) 3.75m in a third round of funding from existing investors 3i, Royal Bank of Scotland, and Scottish Equity Partners.
Meanwhile, Midlothian-based Lab901 said it had raised (pounds) 1m in cash and grant assistance from a clutch of backers. This money will be used to get the company's ScreenTape - a miniaturised version of DNA testing equipment - ready for commercialisation next year.
Bellshill-based Photonic Materials, which develops and manufactures optical crystals for emerging technology applications, raised (pounds) 1.75m from 3i, (pounds) 900,000 from Royal Bank of Scotland, (pounds) 850,000 from Scottish Equity Partners, and (pounds) 250,000 from its own management.
After the collapse of the telecoms market in 2001, the company repositioned itself to address emerging sectors of medical imaging market, in which it has now establishing itself as a key supplier.
Photonic Materials said the funds will be used to increase production capacity for its so-called positron emission topography, or PET, technology, which will enable the company to ''capture a large share of the fast-expanding market for crystals used in medical imaging devices or scanners''.
One of the few opto-electronic firms left in Scotland following the demise of the Essiet, Terahertz, and the soon-to-
close-its-doors former Kymata plant in Livingston, Photonic Materials said the PET scanner market in the US alone has grown from virtually nothing in the late 1990s to $650m ((pounds) 355m) in 2003, and is expected to exceed $1bn in 2005.
Dr John Nicholls, chief executive of Photonic Materials, said: ''Photonic Materials is passionate about the development of advanced crystal products that will enable our customers to deploy faster PET scanners that produce improved image quality.''
Andrew Davison, of Scottish Equity Partners, added that he expected the funding to enable Photonic Materials to ''drive sales growth and take the business into profitability''.
Meanwhile, Lab901 has raised (pounds) 675,000 in second-round equity funding, the ''majority'' of which is follow-on investment from the company's original backers at the Archangel investor's group. Some cash was also supplied by the Scottish Enterprise Co-Investment Fund and the Business Growth Fund.
Joel Fearnley, co-founder and managing director of Lab901, said the remainder of the (pounds) 1m package came in the form of a (pounds) 325,000 SPURplus award.
The money will be used to hire half-a-dozen scientists and engineers to assist in getting ScreenTape to the pre-production stage by the end of this year. This will take the total number of jobs at the Loanhead firm to 12 by the close of 2004.
''The next stage, 2005, will
be about commercialisation,'' Fearnley said. He added that Lab901's search for sales and volume manufacturing partners would begin towards the end of this year.
ScreenTape aims to dramatically speed up laboratory testing times by using smaller ''microfluidic'' samples that produce faster results and take up less valuable laboratory space. This is being developed initially for DNA testing by biotech firms, and will later be expanded into protein sampling and drug discovery.
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