Press Release
October 8 2003
Five Star Technologies Announces $4.5 Million in New Venture Funding
New capital and new business model to expand economically-scalable, nanotechnology manufacturing technique to a broad range of industries.
Cleveland, Ohio. October 8, 2003. Five Star Technologies said today that it has closed a Series C investment round of $4.5-million dollars led by Morgenthaler Ventures. Other investors include Chevron Technology Ventures, Early Stage Partners, and Industrial Technology Ventures.
The company plans to use the funds to continue development of applications for its hydrodynamic cavitation process technology, a patented high-throughput approach to the development and manufacture of nanoscale materials and formulations. These include a wide range of inorganic and organic materials such as complex metal oxides used as catalysts; chemical compounds used in pharmaceuticals; nanoscale additives used in advanced polymers including carbon; pigments; and various clays and other minerals. Most of these materials are already well-established in their applications. The ability to create uniform nano-sized particles, however, offers the potential to greatly enhance their effectiveness by increasing total surface area, improving absorption, and adding other beneficial attributes.
Some of Five Star's nanoscale applications are already in commercial use, many are well along in commercial development, and others are still in research. According to James Mazzella, President and CEO of Five Star, "controlled flow cavitation™ is a cost-effective high-throughput platform technology with applications that cut across a broad range of materials classes and markets. The growth opportunities are tremendous."
Early target markets include materials in pharmaceuticals, emission control catalysts, specialty chemicals, and advanced polymers. Other potential markets include wastewater treatment, mineral recovery, and consumer health and beauty products. "Each of these markets," says Mazzella, "requires specific technical skills and different business contacts. The task for Five Star has been to develop a flexible business model that allows us to optimize our personnel and resources to deal with each market effectively. Accordingly, we will continue to address smaller markets from our core company, but also address larger markets by creating business teams working in independent business units. To do the latter, we plan to work closely with our venture capital and corporate partners."
"Morgenthaler has been searching for an opportunity to invest in nanomaterials for some time," says Greg Blonder, general partner at Morgenthaler Ventures. "Five Star is the first company we've encountered with proven high volume capabilities across a wide range of markets. Its technology is unique and can dramatically improve the performance of conventional materials by converting them to engineered nanoscale powders and dispersions."
About Hydrodynamic Cavitation
Hydrodynamic cavitation is the formation, growth, and implosive collapse of vapor bubbles in a liquid created by fluctuations in fluid pressure. Long known to engineers as an extremely powerful mechanical force, it can cause, when uncontrolled, the erosion of turbine blades, submarine propellers, pipes and valves. Five Star Technologies' controlled flow cavitation™technology is the first to control the hydrodynamic cavitation process in a way that allows the company to both produce particles in high volume and custom-select such characteristics as uniform particle size and crystalline structure. It is covered by 11 U.S. and three European patents.
About Five Star Technologies
Five Star Technologies is a privately held advanced materials and process development company focused on the application of its core process technology - controlled flow cavitation™ to provide specific micro- and nano-materials solutions for a wide range of challenging applications.
About Morgenthaler Ventures
Morgenthaler, a leading venture capital and buyout firm (www.morgenthaler.com), was founded in 1968. The firm focuses on early-stage technology investments as well as middle-market management buyouts. It has funded over 180 companies in its 35-year history, including two of the last decade's highest performing IPOs: Microchip Technology (1993) and Premisys Communications (1995). Current representative portfolio investments include such component and materials companies as Lamina Ceramics, NanoOpto, Peregrine Semiconductor, and Paratek Microwave. With its $850-million fund raised in early 2001, the firm has a total of just under $2.0 billion under management.
About Industrial Technology Ventures
The Industrial Technology Ventures, L.P. is a $50 million Cordova Ventures affiliate fund focused on growth stage capital investments in companies with strong management teams and proprietary technologies that create significant bottom-line value within established industries. Cordova Ventures is a private equity firm with over $300 million under management, founded in 1989 and headquartered in Atlanta, GA. Cordova Ventures is a member of the General Partner of Industrial Technology Ventures along with AIG Global Investment Group.
About Early Stage Partners
Early Stage Partners LP is an early stage venture capital fund based in Cleveland, Ohio. The company invests primarily in promising opportunities in the life sciences, polymers and advanced materials, information technology and advanced manufacturing. The company's principals have over ninety years combined experience in early stage company formation and development, with a significant network of relationships throughout the United State that can be used to attract management, develop strategic partnerships, and provide later stage fundin
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