By Daniel Hunter
Business Growth Fund (BGF), established to help the UK’s fast growing smaller and medium sized businesses, has announced its investment of £3.85 million of growth capital in Glasgow based technology business M Squared Lasers.
BGF will take a minority stake in the business and will join the existing board. This is BGF’s second investment in Scotland this year following its backing of STATS, an Aberdeen based oilfield service sector business, in March. It is also BGF’s second investment in a business that manufactures its own products.
M Squared Lasers designs and manufactures lasers and photonic optical instruments for applications in remote sensing, frontier science, bio-photonics, defence, microscopy, spectroscopy and metrology. M Squared’s laser based systems can remotely detect and image gas leaks and perform environmental monitoring; for example, identifying the extent and location of a methane leak in the oil and gas industry. Other remote sensing applications include the detection of explosives, chemicals or pollutants.
The company was founded in 2005 by Dr Graeme Malcolm and Dr Gareth Maker, who previously founded opto-electronics company Microlase in 1992 as a spinout from Strathclyde University. Microlase was acquired by a Nasdaq listed company in 2000. The former chairman of Bookham Technology, Peter Bordui, recently joined the company’s board.
M Squared Lasers has been backed to date by Scottish Enterprise and Melville Capital. In 2009, it was given a funding boost to expand into the US by Clydesdale Bank through the Enterprise Finance Guarantee. With an office in San Jose, California, the company sells lasers to and collaborates with a range of blue chip partners and research institutions across Europe, North America and Asia, including Thales, Philips, Osram, Stanford University and the Max Planck Institute.
BGF’s £3.85 million equity investment will fund the company’s research and development programme as well as its sales and marketing efforts.
“We are seeing considerable expansion in the potential applications for lasers, not least in the defence and medical industries where detection capability is critically important," Dr Graeme Malcolm, co-founder and CEO of M Squared Lasers, commented.
“For us this offers real growth potential. BGF’s investment will allow us to further develop our laser technology and fund our sales and marketing efforts. In particular, we are looking at new market opportunities in remote sensing, and will specifically focus on developing our Firefly laser product, which has a clear application for the security and defence, oil and gas, and food and drink industries.
“Gareth and I have built a laser manufacturing business in the past and we therefore understand the benefit that an equity injection can bring. We looked at a number of options and then approached BGF directly. Having spent time talking to them over the last 6 months, we feel confident that they are the right fit for us.”
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