A presentation to: NanoImpact, Tokyo1

Nanotechnology in Germany –the investor’s perspective
Dr. Hansjoerg Sage
A presentation to: NanoImpact Tokyo
30 September 2005
www.3i.com
Hansjoerg.Sage@3i.com
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A presentation to: NanoImpact, Tokyo
Nanotechnology in Germany

Contents
1 Brief introduction to 3i
2 Overview over German nanotechnology infrastructure
3 Areas of interest for a venture capital investor
4 Challenges associated with VC investments in nanotech
5 Examples of German nanotechnology start-ups3

Brief introduction to 3i4

A presentation to: NanoImpact, TokyoBrief introduction to 3i

3i – the facts• A world-leader in private equity and venture capital• Established for 60 years• FTSE 100 company valued at €6 billion• Over 500 trade sales and 83 IPOs in the past 5 years• Over 250 market-facing investment professionals• Proven international, cross-border offer

As at 31 March 2005

International scale and reputation
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A presentation to: NanoImpact, Tokyo
Brief introduction to 3i

Active across all funding stages
Private equity
Venture capital

Growth capital

Buyouts

Early stage
Focus on technology

A range of bespoke
solutions

Smaller & mid-marketbuyouts

Total investments of€2-50 million

Investments of€10-100 million

Transactions up to€1 billion€1.1 billion portfolio*€2.1 billion portfolio*€3.7 billion portfolio*

As at 31 March 2005

*portfolio value including co-invested funds

An exceptional range of venture capital and private equity solutions
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A presentation to: NanoImpact, Tokyo
Brief introduction to 3i

3i’s global venture capital team
3i team
3i portfolio ofcompanies
Corporate
relationships
Managementteams andentrepreneurs
Advisers andintermediaries
USWest Coast - 9
East Coast - 7

UK
Cambridge - 3
London - 18

FranceParis - 3

Germany
Munich - 8

NordicHelsinki – 3
Stockholm - 2

Asia PacificSingapore - 2
Hong Kong - 1

Sectorcommunities
3i’s people
programmes

3i - connecting talent and experience7Overview over German
nanotechnology infrastructure8

A presentation to: NanoImpact, Tokyo
Overview: German nanotechnology infrastructure

Nanotechnology research conducted bothin public and private sector
Universities

Corporates

NanotechResearch

Start-ups

Researchorganisations9

A presentation to: NanoImpact, Tokyo
Overview: German nanotechnology infrastructure

Government has increased funds fornanotech research projects continuously
350

Institutional funding
BMWA Project funding
BMBF Project funding

300
250
200
150
1005002002
2003
2004
2005
source: http://www.techportal.de/

BMBF funding(in mn €)Nanoelectronics
Nanomaterials
Optical technology
MEMS
Communications
Nanobiotechnology
Production technology
Sum

2002
19,9
19,2
18,5
7
4,3
4,60,273,7

2003
25
20,325,2
7
4
5,4
0,887,7

2004
44,732,7
26
9,4
3,6
5
2,2
123,6

2005
46,238,1
26
10,2
3,4
3,1
2,2
129,2

source: http://www.techportal.de/Main areas in 2005 are Nanoelectronics, Nanomaterials and Optics10

A presentation to: NanoImpact, Tokyo
Overview: German nanotechnology infrastructure

Project funding is complemented by funding
for institutions
Nanotechnology funding (in mn €)BMBFBMWADLG & Caeser
Wissensgemeinschaft G.W. Leibnitz
Helmholtz-Gemeinschaft
Max-Planck-Gesellschaft
Fraunhofer-Gesellschaft
Sum

2002
73,9
21,1
61,8
23,7
38,2
14,8
4,6
238,1

2003
88,2
24,5
63,3
23,6
37,1
14,8
5,4
256,9

2004
123,824,5
64
23,4
37,4
14,8
5,2293,1

2005
129,2
23,764,423,5
37,814,84,9298,3

source: http://www.techportal.de/Private sector also contributes significantly11

A presentation to: NanoImpact, Tokyo
Overview: German nanotechnology infrastructure

Research is highly decentralized (I)Ultrathin layers
Lateral nanostructures
Nanoparticles
Molecule architectures
Ultraprecise surface treatment
Measurement and analysis
of nanostructures
University research
Non-university researchCompanies

source: Bundesministerium für Bildung und Forschung, Nanotechnologie erobert Märkte
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A presentation to: NanoImpact, Tokyo
Overview: German nanotechnology infrastructure

Research is highly decentralized (II)Ultrathin layers
Lateral nanostructures
Nanoparticles
Molecule architectures
Ultraprecise surface treatment
Measurement and analysis
of nanostructures
University research
Non-university researchCompanies

source: Bundesministerium für Bildung und Forschung, Nanotechnologie erobert Märkte

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A presentation to: NanoImpact, Tokyo
Overview: German nanotechnology infrastructure

US funding is of comparable size
Nanotechnology funding (in mn €)20022003

2004

NSF
DoD
DoE
NIST
NIoH
NASA
OthersSum of U.S. funding
Sum of EU funding
thereof German funding

204
204
897759
35
9677
480
240

221
221
133
66
65
339748
700
250

249
222
197
6262
31
18841
740
290

source: http://www.sc.doe.gov/

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Areas of interest for a venture
capital investor

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A presentation to: NanoImpact, Tokyo
Areas of interest

Nanotechnology spans a wide spectrum ofR&D
Application areas

Examples

VC Interest

Precisionmechanics/optics/analysis

MEMS, Array optics, Diodelasers

Medium - HighChemistry/Materials

Carbon nanotubes, functional
coatings

MediumEnergy/Environmental
technology

Hydrogen storage, Dye solar
cells

Medium - High

Medicine/Life Science

Tissue Engineering, Drug
Delivery, Lab-on-a-chip

Medium - High

Automotive constructionNano-particles, anti-reflection
coatings

Electronics/Information
technology

Spintronics, OLED, GMR
sensors

LowMedium

Source: Bundesministerium für Bildung und Forschung16

A presentation to: NanoImpact, Tokyo
Areas of interest

In Germany chemical nanotech is one of
the focus areas
Most important applications:chemistry and materials
information and communication
security/defense
enivronment
consumer products
transport0%major impact

a lot

20% 40% 60% 80% 100%moderate

a little

not at all

Source:European Strategy for Nanotechnology

Opportunities with Chemical Nanotech?
454035302520151050% of Respondentsthinking chemicalnanotech has
business
opportunities

JapanUK

US

Germany

Source:3i Survey

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A presentation to: NanoImpact, Tokyo
Areas of interest

Appetite with regard to risk / return profiles
varies widely
ExistingNew

application

application

Innovation process
Core R&D

New material,

Materials
Development

R

isk?

new process

Existing

Application
Supportmaterial,
new process

Manufacturing

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Challenges associated with
VC investments in nanotech

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A presentation to: NanoImpact, Tokyo
Challanges

Nanotechnology investing is still in infancy• Often interesting technology without real, large-scale market need• Lack of proven business models− Materials production (difficult position in value chain, in-housemanufacturing not easy for start-up )− Licensing (limited value capture)− Capital equipment (cash requirements!)• Long timeframes from research via development to commercialization(40% IRR attainable?)• Existence of exit markets (especially materials)• Proven management teams willing to take risks and looking for rewards
the VC environment can offer
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Examples of German
nanotechnology start-ups

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A presentation to: NanoImpact, Tokyo
ExamplesAdvanced Materials and Processes: OtherHigh throughput experimentation services and equipment•High throughput experimentation allows
acceleration of catalyst development
processes•

hte is providing high throughput to chemicaland petro industry•

In addition, hte is working on an own line ofblockbuster products such as Diesel catalyst•

Customer benefits:− Substantial R+D and manpower savings− Full offerings of service, know-how andequipment− Reduction of development time by ahte AG•

Location: Heidelberg, Germany•

Website: www.hte-company.de•

3i contact: Andreas Kochhäuser,+49 711 222922 0,
andreas_kochhaeuser@3i.com•Dirk Demuth, CEO, +49 6221 74970
dirk.demuth@hte-company.defactor 100 to 1000•

Target Markets: Oil & Gas Industry,
Chemical Industry, Automotive.

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A presentation to: NanoImpact, Tokyo
ExamplesNano-coating techniques for every surface•

Nanogate concentrates on inorganic-organic
nanocomposites as well as self-organisingnano-structures based on chemical nanotechnology•

As a complete-services provider Nanogate
provides ranges from innovation consulting
to materials engineering, production,applications support and marketing all theway to high-availability service.

•The company’s focus lies on materials-based
processes to develop, manufacture andmarket multifunctional materials.

Nanogate Technologies AG•

Location: Saarbrücken, Germany•

Website: www.nanogate.de•3i contact: Sören Schuster,+49 711 222922 0,
Soeren_Schuster@3i.com

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A presentation to: NanoImpact, Tokyo24