Intense bucks optoelectronics trend by raising another £10.5m

INTENSE Photonics, the optical chip developer, has raised £10.5m to accelerate its development programme and strengthen its marketing team.

The deal is one of the largest funding rounds in Scotland this year and the biggest ever for Intense, which raised £7.75m (€12.4m) in June last year.

David Lockwood, the Hamilton company's chief executive, said: "Unless the market does something completely bizarre, this should see us through to profitability."

Intense's second full funding round was led by Cazenove Private Equity and backed by 3i, ACT Venture Capital and two European VC funds, FNI and TTP.

The company designs and manufactures multi-function optical chips which allow large amounts of telephone traffic to be processed using light rather than electricity. The fact that it was able to raise more than £10m is particularly impressive, given the poor health of the global optoelectronics sector.

Terahertz Photonics, another Scottish opto company, was forced to sack staff, sell part of its business and settle for second round funding far below its original target earlier this year.

Tod Bensen, Cazenove Private Equity's chief executive, said: "The many current and potential applications of Intense Photonics' techniques have given us the confidence to invest in the company at a time when most photonics companies are struggling and market visibility remains poor."

Intense is working with four large potential customers and plans to start full-scale manufacturing at the former DuPont Photomasks factory near Hamilton in about a year. Mr Lockwood said: "I always knew we had a strong proposition. We have not had to redesign the company and are doing the things we wanted to do."

The company holds the intellectual property rights to a component processing technique called quantum well intermixing. This allows the production of chips which can help telecoms networks to run at lower cost and with more functions.

douglas.friedli@businessam.co.uk