A tale of two spin-outs
Article Date: Aug 29 2006
In 2003, ZBD recruited Clive Mayne to become chief operating officer. (Jones himself is chief technology officer). ‘He’s done wonders,’ says Jones. ‘He’s got great experience of taking projects to market. He’s shifted our focus purely onto the retail sector. Now we have one big London department store trialling our displays and another chain has just signed up to start trials. We need to raise another £5-10 million over the next year; we need one more round of funding before we can be cash-positive.’
In the spin-out, Jones and his colleagues parted with most of the equity in the business. But it isn’t the equity that drives them. Of course, he would like to see his mortgage paid off as a result of his intense work. But his passion is problem solving. ‘When our investors decide to move on I’ll consider what to do next,’ he says. ‘I can see myself starting again. I would start with a team of one or two and build another company. I’d like my next project to be my idea, although I could do a good job with somebody else’s. There is a big kick in sitting down with a piece of paper and, five years later, seeing what you have created.’
Kevin Matthews would endorse many of Cliff Jones’s comments. ‘The best advice I ever received,’ says the CEO of nanotechnology company Oxonica, ‘was to always focus on what the customer wants. Even in a technology organisation you mustn’t get distracted by the science at the expense of the customer. Scientists have a great way of explaining what their technology does rather than what it solves. With more and more British scientists wanting to be part of a spin-out, I’d advise them never to forget this crucial message.’
Oxonica began life in Oxford University in 1998. Originally called Nanox, it was started by ISIS Innovation, the University’s technology transfer company, with Professor Peter Dobson and Dr Gary Wakefield being its academic founders. Wakefield continues to lead the group’s research activities. Through several rounds of funding, the group raised £12.5 million from a range of investors including BASF Venture Capital, Foresight VCT and Trivest VCT. In July 2005, it raised £7.1 million from a placing on AIM.
‘Nanotechnology is going to be a huge industry,’ says Matthews, who joined Oxonica as CEO in 2001. ‘Over $8 billion has been invested in it, but Oxonica is one of the few firms to have revenue generating products in the sector. The reason is pretty simple. We don’t get distracted by the technology. Instead, we look at the real world for a problem that needs solving, and then look around for technology that will help.’
The company currently has two products – Optisol sun-screen and a diesel catalyst called Envirox. The former came from an observation that skin cancer was on the increase because sun protection from UVA was not as effective as for UVB. Founder Professor Peter Dobson, said he could solve it. A four-year research project was commissioned. ‘We ended up with a product that addressed a problem raised by a biochemist using solid state physics, but at every stage our research was focused on a basic market need,’ says Matthews.
But the company also wanted to work in a higher-risk and larger marketplace. The energy industry beckoned. ‘We saw a need to improve the efficiency of diesel engines, so we found some basic technology from a private UK company, which we licensed. The catalyst took four years to develop. It uses cerium oxide, the same ingredient used in petrol engine catalytic converters. Normally the cerium oxide clumps and settles in the fuel tanks, limiting its effectiveness. Our ingenious solution is to wrap nano-sized particles in a special polymer, which keeps them isolated. The surface area of the cerium oxide is maximised, this improves combustion efficiency by more than five per cent. For a client such as Stagecoach, which uses 17 million litres of diesel every year this means huge cost savings.’ Stagecoach was also a major investor in the AIM placing.
