New fund targets Canadian-based nanotechnology startups

A Toronto venture capital company has inked a deal with a state-owned Russian firm to create a fund that will invest in Canadian startups in the nanotechnology sector.

VentureLink Funds, a long-time player in the labour-sponsored fund sector, will team up with Rusnano Corp., a huge entity created by the Russian government to boost that country’s nanotechnology sector.

VentureLink managing partner John Varghese said Rusano is searching the world for advances in the field – a rapidly advancing technology that engineers materials at the atomic and molecular scale to create new products for medicine, electronics and energy production – and will provide most of the fund’s initial capital.

High net worth individuals in Canada will also be approached to invest, and the goal is to create a fund in the $100-million to $200-million range, Mr. Varghese said.

The advantage for Canadian companies in the sector is that Rusnano will help them find markets for their products in Russia. Many of the ventures that will receive capital may develop technology specifically for Russian customers, and even build plants there, Mr. Varghese said. Essentially they will have a “path paved out” to specific Russian clients.

Nanotechnology is a growing field in Canada, and the University of Waterloo in southwestern Ontario is building a new research institute specifically dedicated to the technology, which is expected to spin off many new developments.

The new fund will mainly look for startup nanotechnology companies making advances in energy production and storage, advanced materials and biomaterials, Mr. Varghese said. “We’re going to identify a handful of projects that we think make sense to be the first target investments.”

Alexander Losyukov, deputy chief executive officer of Rusnano, said his organization has been looking for partners around the world, and “Canada came into our vision [because] of the good efforts under way here to develop nanoscience and nanotechnologies.”

The first enterprise Rusnano helped create was a plant built to make metal cutting tools with coatings developed through nanotechnology. It is located in Rybinsk, in central Russia.

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http://www.theglobeandmail.com/globe-investor/new-fund-targets-canadian-based-nanotechnology-startups/article1704953/