Business Growth Fund Commits to Scottish Tech Business

UK-based investor Business Growth Fund has committed 3.85 million pounds ($6.2 million) of growth capital in Glasgow based technology business M Squared Lasers. BGF will take a minority stake in the business and will join the existing board.


Business Growth Fund (BGF), established to help the UK’s fast growing smaller and medium sized businesses, today announced its investment of 3.85 million pounds ($6.2 million) of growth capital in Glasgow based technology business M Squared Lasers. BGF will take a minority stake in the business and will join the existing board.

This is BGF’s second investment in Scotland this year following its backing of STATS, an Aberdeen based oilfield service sector business, in March. It is also BGF’s second investment in a business that manufactures its own products.

M Squared Lasers designs and manufactures lasers and photonic optical instruments for applications in remote sensing, frontier science, bio-photonics, defence, microscopy, spectroscopy and metrology. M Squared’s laser based systems can remotely detect and image gas leaks and perform environmental monitoring; for example, identifying the extent and location of a methane leak in the oil and gas industry. Other remote sensing applications include the detection of explosives, chemicals or pollutants.

The company was founded in 2005 by Dr Graeme Malcolm and Dr Gareth Maker, who previously founded opto-electronics company Microlase in 1992 as a spinout from Strathclyde University. Microlase was acquired by a Nasdaq listed company in 2000. The former chairman of Bookham Technology, Peter Bordui, recently joined the company’s board.

M Squared Lasers has been backed to date by Scottish Enterprise and Melville Capital. In 2009, it was given a funding boost to expand into the US by Clydesdale Bank through the Enterprise Finance Guarantee. With an office in San Jose, California, the company sells lasers to and collaborates with a range of blue chip partners and research institutions across Europe, North America and Asia, including Thales, Philips, Osram, Stanford University and the Max Planck Institute.

BGF’s £3.85 million equity investment will fund the company’s research and development programme as well as its sales and marketing efforts.

Dr Graeme Malcolm, co-founder and CEO of M Squared Lasers, commented:

“We are seeing considerable expansion in the potential applications for lasers, not least in the defence and medical industries where detection capability is critically important.

“For us this offers real growth potential. BGF’s investment will allow us to further develop our laser technology and fund our sales and marketing efforts. In particular, we are looking at new market opportunities in remote sensing, and will specifically focus on developing our Firefly laser product, which has a clear application for the security and defence, oil and gas, and food and drink industries.

“Gareth and I have built a laser manufacturing business in the past and we therefore understand the benefit that an equity injection can bring. We looked at a number of options and then approached BGF directly. Having spent time talking to them over the last 6 months, we feel confident that they are the right fit for us. ”

Duncan Macrae, Edinburgh based Investment Director at BGF, commented:

“M Squared’s laser technology represents a genuine step change. Its products are smaller than others on the market, can be calibrated in minutes rather than hours and can be maintained and upgraded remotely via a web browser. Customer referencing has been overwhelmingly positive and we are very pleased to be backing such an innovative Scottish business and a first class management team.”

BGF Business Director, Mark Bryant, who has 30 years’ experience in Industry, primarily as the Managing Director/CEO of manufacturing businesses, will join the board of M Squared Lasers as a non-executive director and will work closely with the management team. Dr John Nicholls, an experienced photonics entrepreneur, who recently joined the M Squared Lasers team as Group Director of Strategic Business Development led the investment process for M Squared.

The advisers to the transaction were Baker Tilly and HBJ Gateley for BGF, and Deloitte, Johnston Carmichael and MBM Commercial for M Squared Lasers.




Emily Weston, Equity Dynamics – 07825 326 442

Corinna Osborne, Equity Dynamics – 07825 326 440

Notes to editors:

About Business Growth Fund:

Business Growth Fund has been established to help Britain’s fast growing smaller and medium sized businesses. Growth potential is the key criteria. BGF will invest between £2m and £10m per business in return for a minimum 10 per cent equity stake and a seat on the board for a BGF director. BGF will provide long-term equity investment for those growing companies that today do not have access to this source of capital. As such BGF hopes to be a catalyst for growth among smaller UK companies.

BGF is an independent company with capital of up to £2.5 billion, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed completely autonomously with an independent management team.

BGF is one of a range of initiatives designed to forge a new relationship between the banking sector and UK businesses, and BGF works in close collaboration with the British Bankers’ Association as well as other key business organisations across the UK.

BGF has invested over £41 million in fast growing companies to date.

About M Squared Lasers:

M Squared Lasers develops and manufactures lasers spanning the entire performance spectrum, from continuous wave to ultrafast, and from deep ultraviolet to terahertz wavelengths. Customers can choose from a large portfolio of standard products or, if needed, work with its experienced OEM development team to deliver specific volume designs. Based in Glasgow, UK, M Squared Lasers provides close sales and service support to its worldwide customer base via a global network of distributors, representatives, and local offices including its subsidiary M Squared Inc in the US.