Nanotech index compliers have another small cap addition since Wednesday afternoon, with the successful IPO of Oxonica. Shares were up as much as 50% on the UKs AIM market.
It’s good to see Oxonica finally making it for two main reasons. Firstly we’ve known Oxonica almost since their formation, and secondly because they are a company with products rather than simply IP or some raw materials.
There’s a lesson in this, and one we have repeated over the last five years, that it takes time to build value in a company, especially in emerging areas of technology. Investors in companies from Nanosys and Nanomagnetics to C60 and Nantero have been left holding substantial investments for far longer than they expected, and publicly traded nanotechnology companies have such as Altair and Nanophase have seen little in terms of the real revenues that would garner any interest from the financial markets or potential acquirers.
Oxonicas products succeed because they are addressing a real market need, whether in the automotive or cosmetics industry, rather than simply attempting to find a home for a new material. This is a business model being increasingly adopted, as companies realise that there is little to be gained by simply manufacturing raw (nano)materials. That may be fine for companies with the size and economies of scale of BASF or AngloAmerican, but it is not a game that nanotech start ups can easily get into.
On a different note, it was significant that the interview with Oxonica CEO Kevin Matthews on Radio 4’s Today program this morning spent much of its slot discussing whether nanoparticles can penetrate the skin, the Royal Society report, and even nanobots and grey goo. Perhaps there is a different lesson there, that any ‘nanotech’ company will always have to address these issues.