A couple of months ago Cientifica raised £241,000 ($389,000) in the UK's stock exchange and the company is now public. According to press releases, Cientifica aims to acquire and build businesses that make use of graphene materials. The company will invest in by buying shares or by buying IP, assets or entering into partnerships of joint-venture arrangements.
Cientifica's CEO Tim Harper was kind enough to answer a few questions I had regarding the company's business and future plans. So first of all - congratulations Tim on the fund raising, the readmission to the AIM and on being the world's first pure-play-graphene applications public company!
Q: You raised £241,000 ($389,000), and your business plan is acquire and invest in graphene related companies. It seems like a very small sum to be doing that (or to be doing anything, really). So how do you plan to use those funds wisely?
The initial fund raise was to complete the CVA and ensure we have enough working capital going forward. As an AIM quoted public company we can access institutional and other investors and raise further funds for specific projects. It is rather different from the VC model where you raise a certain amount and then have to invest it, and ours is a model which I believe works better for emerging technologies such as graphene. It allows us to have a balance of large and small investments, some short term and others longer term which allows us to minimize risk in what is a fast moving technology sector.
Q: Do you think this strategy can enable some revenues for Cientifica in the near future? (1-2 years?)
We are looking at a number of deals which we believe will provide short term revenue. These are real businesses which address quantified market needs, not speculative science projects.
Q: Can you disclose some companies you are already involved with?
Unfortunately we can't disclose any deals until we have formally disclosed them to the market. I can tell you that we are are evaluating some exciting opportunities, some of which promise to be game changers in their respective markets, and that there is no shortage of opportunities to pick from.
Q: You said before that you want to focus on companies and products that use graphene, rather than in graphene producers. Can you explain that view?
We have a lot of baseline data on materials companies, and I have been personally involved with nanomaterials for the past fifteen years. Anyone producing a material like graphene is at the bottom of the value chain, and the only certainty is that competition will increase and prices will be driven down (the alternative is that prices stay high and the material is uneconomic). New graphene producers are popping up every week, and while there are a number of technologies producing a number of varieties of graphene with varying quality there are no clear demand drivers. As a result many companies are speculatively scaling up production to meet a non existent demand. And as we saw with carbon nanotubes and most other nanomaterials, that simply isn't a sustainable business model whether for start ups or large multinationals such as Bayer who recently pulled out of nanotubes.
Our business model is to simply concentrate on applications of graphene. That way we can understand and quantify the market demand, and ensure that we can access the right types of graphene for our applications. It means we don't have to stake the business on a single type of graphene, a single production technology or an unknown market.
Q: What kind of graphene applications do you find most exciting? And which ones will be the first to market in your view?
Ones that make money! There is a lot of talk about touch screen displays and terahertz electronics, but a lot of those applications are either ten years away or put you in direct competition with Samsung and Intel, which doesn't make much sense. Unfortunately we can't talk about specific applications that we are working on until they have been announced, but there's certainly no shortage of opportunities, some of which have been missed by most of the pundits.
Thank you Tim, and good luck to you and Cientifica!