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LNL Scoops Up Nanovation, Optenia

Remember Nanovation and Optenia -- two high profile component startups that went bust? Well, they're back, sort of. Their assets have been bought by LNL Technologies, a small startup that announced $7.1 million in funding today.

Even though they didn't succeed as commercial ventures, both Nanovation and Optenia were the source of some ground-breaking developments in integrated optics. LNL is planning to combine these with its own technology, which is the result of over ten years of research at Massachusetts Institute of Technology (MIT). The resulting monster portfolio of intellectual property should make the startup worth watching in the future.

Back to the beginning. LNL was founded in April 2001 by a group of MIT scientists, including Professor Lionel Kimerling, a well-known member of MIT's department of materials and engineering science, and Kazumi Wada, a senior lecturer at MIT and former research group leader at NTT Communications Corp.

LNL's aim is to shrink down photonic circuits. For starters, it claims to have reduced the size and bend radius of a photonic "wire" or waveguide, by several orders of magnitude -- from 1 cm to a few microns. LNL also claims to have invented a way of sending light from an optical fiber into a miniaturized waveguide with minimal power loss. These are core technologies that can be applied to any materials platform, says the company's CTO, Desmond Lim.

LNL isn't saying exactly how it can shrink down waveguide bends, but miniature resonators seem a strong possibility. Kimerling is famous for, among other things, his work on "photonic bandgap resonators" -- miniaturized filters that pick out one wavelength from many (see this article in the MIT Reporter which describes his work).

When it was founded, LNL picked silicon as its materials platform. This is a slightly unusual choice for optics, but one that makes it simple to add electrical functions. It also has the advantage of being compatible with standard electronics manufacturing techniques -- indeed, LNL claims to have demonstrated its core technology using a prototype built at a standard CMOS foundry in Singapore.

But, in April 2002, LNL acquired the intellectual property and patent portfolio of Nanovation Technologies, a startup that had been developing integrated components in indium phosphide originally, and later in silica-on-silicon (see Nanovation Bounces Back).

Kimerling and Nanovation go back a long way. In January 2000, Nanovation agreed to donate $90 million over six years to MIT to set up a new center of research in integrated optics, and Kimerling was the director. In a press release issued at the time, the situation was cited as a fine example "of the emerging partnerships between industry and universities." But in reality, Nanovation may have been prompted to make the donation because it needed access to some technology MIT could provide.

When Nanovation fell on hard times, it was forced to negotiate its way out of the deal, contributing only $4 million in the end (see Nanovation Goes Bust). "One of the reasons that Nanovation failed was that it lacked the technology it was coming to MIT for," Lim contends.

A couple of months ago, LNL acquired the assets of Optenia, which was developing echelle gratings -- an alternative to Arrayed Waveguide Gratings (AWGs) for multiplexing and demultiplexing wavelengths -- based on silica-on-silicon materials (see Optenia's Loss is MetroPhotonic's Gain). LNL has also hired some ex-Optenia staff.

Since the purchase of Optenia, LNL has decided to pursue the echelle grating technology first, in part because it believes it can bring this to market the quickest. "Optenia actually had purchase orders for its products," Lim notes. LNL hopes to have products available sometime this year but doesn't wish to commit itself to a timescale.

LNL raised its $7.1 million capital over the period since September 2001. "The markets haven't been great," says Chuck McMullan, its director of business development. "We had more success with a grass roots kind of approach, and took seed funding from business angels." Among the investors willing to be named are Larry Mohr of Mohr Davidow Ventures and Sandy Robertson, founder of former investment bank Robertson Stephens and chairman of Francisco Partners. Both are also board advisors for LNL.

LNL declines to reveal how many people are in the company. "That would give away too much about us in a back-of-envelope kind of way," says Lim. At this point, Lim and McMullan got jumpy about answering more questions, made their excuses, and left.

— Pauline Rigby, Senior Editor, Light Reading
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desikar 12/5/2012 | 12:52:50 AM
re: LNL Scoops Up Nanovation, Optenia Why would technology that did not work (when there appeared to be market potential) and now does not have clear market potential AND may not work, be worth reviving?

Flummoxed,
desikar
opticalweenie 12/5/2012 | 12:52:49 AM
re: LNL Scoops Up Nanovation, Optenia Note that they mostly acquired the intellectual
property and patents that these people had. Probably not worth much now, but in the future, with more advancements in photonic crystal technology it may be that the ideas - or more properly the methodologies - that the original companies had on fabricating these types of structures on chips will be worth something.
If you go to LNL's web page you will see that they do not claim to have any products, nor do you see a roadmap for any type of product. It appears that that right now they are in pure research mode, as they should be, for the technology they are working on is rather new. Lots of stuff needs to be fleshed out before they can make grandiose claims that their technology will revolutionize the telecom industry. It was the latter that contributed to the bubble/bust - semi educated idiots claiming to have great scientific ideas and scientifically illiterate investors that took it hook, line, and sinker.
Weenie
gadfly 12/5/2012 | 12:52:43 AM
re: LNL Scoops Up Nanovation, Optenia Ah yes, kiddies, here we go again.
The great technical wunderkids convince the VCs that they have the golden goose once again.
But the market will not want any for a very long time and the ROI will be abysmally weak, asymptotically approaching nil.
Do you see any hope for this, anyone ?
Cheers
Gad
opticalweenie 12/5/2012 | 12:52:35 AM
re: LNL Scoops Up Nanovation, Optenia Gadfly,
I hate to disappoint you, but telecom is not the only market in the world. Integrated optical circuits and photonic crystals are of interest to the "sensor" world - there is currently much interest in building hand-hold optical sensors that can detect a wide range of substances - from carbon monoxide in your basement through explosives residues in your shoes, to water on your car windshield, and your blood sugar level. The market for these sensors is huge already, and is expected to get much larger with all this investment in homeland defense.
I don't think that LNL is giving their dog and pony show only to VCs interested in telecom.
Weenie
badboy17 12/5/2012 | 12:52:30 AM
re: LNL Scoops Up Nanovation, Optenia The acquisition of Nanovation's and Optenia's IP just goes to show you that if your patent porfolio is big enough, the VC's may just throw you some money.

Lim's comment that Nanovation needed MIT's IP is just pure BS. Most university research is far from ever becoming a real product, if ever, so Nano's courtship dance with MIT was mostly PR to get the attention of VC's for funding. If genuine IP resulted from the marriage, so much the better.
gadfly 12/5/2012 | 12:52:21 AM
re: LNL Scoops Up Nanovation, Optenia optical weenie: you specifically mentioned telecom markets - my comments were more general,
I do agree that sensors in many forms have more potential in the near term.
my view continues to be that the return on investment in this one will be low if any at all.
optical crystals are one of the waves of the future but that has been the case for about a decade already.
Where is the killer application that needs this stuff ?
Cheers
Gad
jssreenath 12/5/2012 | 12:52:20 AM
re: LNL Scoops Up Nanovation, Optenia That Issac Newton character that Nanovation had at their OFC 2001 booth? If those chicks were part of the deal, it was a worthwhile investment, if not, they are stupid.
opticalweenie 12/5/2012 | 12:52:14 AM
re: LNL Scoops Up Nanovation, Optenia Gadfly,
I have no idea if there will ever be a killer application for photonic crystals. I think the current understanding of the behavior of these systems is still too undeveloped to be able to predict what new improvements they will bring to anything. If they can help me miniaturize my optical circuits even further then I would just be happy with that.
Weenie (and yes fulgerator I am an overeducated geek who firmly believes that it would be economically and socially beneficial if the general public were better educated in science)
fulgurator 12/5/2012 | 12:52:14 AM
re: LNL Scoops Up Nanovation, Optenia >>It was the latter that contributed to the bubble/bust - semi educated idiots claiming to have great scientific ideas and scientifically illiterate investors that took it hook, line, and sinker.
<<

Just imagine the Utopia if only we had scientifically literate investors funding the great scientific ideas of fully-educated idiots.

f
fulgurator 12/5/2012 | 12:52:12 AM
re: LNL Scoops Up Nanovation, Optenia >>
(and yes fulgerator I am an overeducated geek who firmly believes that it would be economically and socially beneficial if the general public were better educated in science)
<<

Me too, big time. However, the start-up glut was not built around poor science, but poor application of science to commerce.

f
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