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Ardesta-VC Commitment

Mr. Sandeep Malhotra

By MOON-HEE ANDERSSON
There are obviously differences as to the way nanotechnology is viewed in the US and in Europe. In the US nano is a buzzing word and major players are pitching in helping to build the boomtown of tomorrow. In Europe the spirit is a just a tad more hesitant. Why?

Transatlantic rift?
Almost stereotypical arguments such as spirit of entrepreneurship, commercial experience and intermixing between academia and business tend to come up. Or is it all just a matter of who takes the lead? Some say talent crosses the ocean and moves to where the action is. If this is true a more apt attitude in taking nanotechnology projects to the next level will widen the transatlantic rift to such a degree that Europe is left behind in what may be the next industrial revolution?

DIY NanoTech
Ardesta is an American incubator firm established in October 2000 focused on the emerging market of small technology with about $100 million under its management. This forward-looking player isn’t just talking nano either. They committed to small technology that includes MEMS and Nanotechnology and have so far invested in, to mention a few, the following companies; Discera, Konarka Technologies, Sensicore, Handylab, Neophotonics, Sarcon, and Therafuse. .

NanoNordic had the pleasure of talking with Mr. Sandeep Malhotra, Vice President at Ardesta LLC. Mr. Malhotra holds an MBA from Harvard University and an MS in Chemical Engineering from Cornell University. He has spent six years in Motorola’s semiconductor business, and also spent time as a consultant at Booz-Allen and as an M&A banker at Broadview International. At Ardesta Mr.Malhotra is responsible for the incubation of technology spin-outs from leading universities and research labs in North America and Europe. His areas of focus include Advanced Materials, Energy, Semiconductor Components & Processes, and Medical Devices & Diagnostics.

New Blood
Last fall NanoNordic surveyed the Swedish venture capitalist community asking about their thoughts about investment opportunities in nanotechnology. A clear majority felt that nanotechnology is not an investment area in its own right and that it’s still stuck in the lab. Given Ardesta’s clear focus on small tech, we asked Mr. Malhotra the same question. He stated that first of all; it’s important to know that nanotechnology is not an industry, it is an enabling technology. Investing in nanotechnology isn’t different than investing in other technologies. However, due to the cross-disciplinary nature of nanotech, the VC community certainly needs an injection of new experience. “Nanotechnology is all about trying to solve big problems in different areas such as information technology, human medicine and energy. There are some grand challenges out there. Due to the cross-disciplinary nature of nanotechnology you get multiple approaches trying to solve the same problem.” This is certainly demanding and thus VCs need new skills to approach these projects. “We need people with knowledge and skills in the areas of advanced materials, the physical as well as biological sciences to understand the technical merits of a project. People must be able to deal with the cross-disciplinary aspects of nanotech”.

Barriers
I asked Mr. Malhotra about investing opportunities. His answer came quickly: “there are selected opportunities today and many innovative ideas in the nanotech pipeline”. He mentions the biggest barriers to commercialization being the structural difficulties in the relation between academia and business. “I have met numerous researchers that are developing platforms telling me they have an invention that can be applied to A, B and C, but what the venture capitalist is really interested in is: What is the big market , what is the path to product, and how can we make revenue?” Researchers and academics would benefit tremendously from interaction with the R&D and Product Development community in business as well as the venture capital community in order to think and work along market lines.

Risks & Investment trends
Through out the history of invention, research has always been sponsored by governments and the military industry. It is the role of a government to foster new scientists and innovations. The venture capitalist has nothing to do with funding R&D, however Mr. Malhotra believes venture capital need to start taking more technological risk even though government take the highest risk.

Exodus - ongoing brain-drain from Europe to the US

Exodus
There is an on-going brain-drain from Europe to the US. Researchers who want to do cutting edge work keeps moving to the states. Mr. Malhotra says that he meets so many excellent European researchers in the US. Part of the problem is that the European VC industry is not as well developed as their US counterparts. US venture capital seems to have a higher ability in risk-taking than in Europe. So of course when European researchers want to capitalize on their innovation they are forced to do it outside Europe. This makes for a lot of IP flowing into the US. Mr. Malhotra believes this will increase even more in the next ten years. And, again, there is that strong entrepreneurial culture. Even though some tremendous changes took place during the European IT-boom, there is still some way to go to equal the US in this area.

A race of excellence
Mr. Malhotra thinks the global nanotechnology race has begun. The contenders are the US, Japan/Asia and Europe. The US is well positioned having taken the lead through its National Nanotechnology Initiative. Europe attempt to catch up through the FP6 initiative. Germany is definitely the worlds strongest when it comes to advanced materials. I asked Mr. Malhotra what he thinks about the future and who he believes will win this race. “What happened under the IT-boom was that Asia gained manufacturing excellence. A lot of nanotechnology applications are manufacturing intensive and this obviously gives Asia a very strong position indeed.” Mr. Malhotra believes that when it comes to nanotech and IT, USA hand in hand with Japan will definitely take the lead. He continues: “Europe on the other hand possesses expertise in various areas and will like in the past, be somewhere in between.” As an advice Mr. Malhotra says: “Europe and the Nordic region, in order to catch up, needs to launch some kind of initiative with a strong focus on a few chosen areas in order to excel. Today the spread of investments is too broad.”

Skiing the key to Nano-excellence?
When it comes to the Nordic region in particular Mr. Malhotra thinks we need to attract people from the US to add knowledge, experience and ideas. Considering the high quality of life that he keeps hearing about, it shouldn’t be a problem. And that seems to be a good point to thank Mr. Malhotra and hope that the great outdoors of the Nordic countries will help attract the right people needed not to do well just in the ski slopes.


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COPYRIGHT: The information contained herewith are the opinions of the authors and not those of the publishers. This documentation is strictly under copyright of the authors and Nano Nordic. To be reproduced specific permission is required. HOME