News Article

Venture capitalists shoot $2.5M to Maxion for lasers
Date: Feb 26, 2007
Author: Ben Hammer
Source: bizjournals ( click here to go to the source)

Featured firm in this article: Maxion Technologies Inc of Jessup, MD

Investors have given Maxion Technologies a $2.5 million first round of venture capital and a new CEO to market its lasers and build a manufacturing capability.

Several former Army Research Laboratory staff started the Hyattsville company in 2000 with $500,000 in seed funding from ECentury Capital Partners to commercialize lasers that are a thousand times more sensitive than those used today. The lasers are suitable for portable devices because they operate at room temperature under normal conditions and with low power requirements.

Maxion has paid for its own research and development since 2003 mostly with federal contracts for defense and homeland security. The company now sees its growth in making lasers for sensors used in medical devices, hardware for environmental monitoring, industrial process and quality controls and chemical weapons detection.

The transition isn't an easy one, so new investor Chart Venture Partners has installed its own partner, Fred Arnold, as Maxion's chief executive. Arnold says the company's biggest challenges are ramping up capacity to make hundreds of the same lasers at a time, and convincing companies to buy those lasers.
Maxion's plan is to provide the lasers that manufacturers can use in sensor devices. The company wants to partner with others developing new applications, and then sell the lasers when the products hit the market.

On the medical diagnostics front, Maxion is working with Daylight Solutions and another company to develop a noninvasive device that measures blood sugar by looking at ocular fluid in the whites of the eye. Maxion wants to work with other companies to develop sensors that detect chemical compounds related to kidney function, diabetes, cancer and other illnesses.

Maxion is also working with a vendor to British Petroleum to deploy lasers that will monitor sulfur dioxide emissions, ensuring they meet new European Union requirements for cargo ships tied to the Kyoto Accord.

Arnold sees process controls -- a market that research firm Frost & Sullivan expects to reach $1.2 billion by 2012 -- as one of Maxion's biggest long-term opportunities. Manufacturers, oil and gas and other heavy industrial concerns use lasers and sensors extensively to ensure that operations run smoothly.
Maxion needs to ramp up its own manufacturing to enter the commercial market. The company grows crystals that form the basis of each precisely calibrated laser, and until now has mostly produced orders in small batches.

The company is now looking to move its headquarters to an 8,000-square-foot space within 20 miles of the Army Research Lab in Adelphi where the company could make large quantities of lasers to fill orders. Maxion has a Defense Department contract to support the lab, and has an agreement to use the lab's facilities at no cost to develop Maxion's own technology.

Maxion also is supplying lasers to the Department of Energy's Pacific Northwest National Laboratory for a project developing chemical weapons detection sensors.

Co-founder John Bruno sees a day when his company moves beyond lasers.

"Eventually when this technology gets to where it's going, there's a real potential that this laser technology gets commoditized," says Bruno, Maxion's president and chief technical officer. "Maxion intends to go into the sensor areas or partner with sensor development companies."