Business Weekly - Cambridge, UK

While Cambridge has produced a crop of $1bn companies in recent years, the global silicon market Plastic Logic has opened up could make it the first $10bn business ever to emerge from Silicon Fen.

Dr Hauser says Plastic Logic’s potential is far greater than that of either ARM or CSR.

He said: “ARM made a breakthrough in microprocessors and CSR achieved the breakthrough in single chip wireless. Look at what they have achieved internationally – and then consider that Plastic Logic has made the big breakthrough in the whole silicon arena.

“It could be the next Intel. I’m not saying it is absolutely guaranteed to hit that benchmark but it certainly has the potential to do so.

“Having founded Acorn Computers in much less sophisticated, less knowledgeable times, I can honestly say I am more excited at what Plastic Logic could achieve. This is potentially the biggest tiger I have ever had by the tail.”

Dr Hauser was commenting after Plastic Logic raised $100m (£51.4m), one of the largest financings in the history of European venture capital – but incredibly just a first closing – to commercialise what it describes as the first ‘take anywhere, read anywhere’ electronic reader products.

As part of the push to market, it is having built the first factory to manufacture plastic electronics on a commercial scale – in Dresden.

The Dresden facility will produce display modules for portable electronic reader devices – a product category predicted to grow to 41.6 million units in 2010. It will have an initial capacity of more than a million display modules per year, with production starting in 2008.

Dr Hauser’s VC firm, Amadeus Capital Partners, as well as Intel Capital were among the investors in the round and he said: “With $100m in its belt, Plastic Logic can expect to see significant expansion.

“COO John Mills has done an amazing job while the company has been seeking a new chief executive but the new firepower means Plastic Logic can attract the best in the world when it comes to the position of CEO or any other senior positions that need to be filled going forward.

“Cambridge technology companies have already successfully recruited world-leading executives from US contemporaries – such as John Hodgson at CSR and John West at Solexa – and this is now in Plastic Logic’s province.”

Dr Hauser confessed that his initial investment in Plastic Logic was, at the time, “a bit of a gamble,” adding: “I became involved through my friendship with co-founder Richard Friend and had such a high regard for the group of people behind the business that I probably backed them as much as the technology.

“I knew when I invested that more inventions would come out after I became involved and so it has proved. And this is just the beginning. I am convinced there are more breakthroughs to come.

“All the world’s transistors are silicon and prime targets for Plastic Logic’s technology.”

Dr Hauser revealed that Wales was the only UK location to make the six shortlisted by Plastic Logic for the new manufacturing facility.

City fathers at Dresden were able to demonstrate how they built a new distribution hub for Fedex in just four months and that a six-month timeline for a Plastic Logic manufacturing facility would be no sweat.

Once the dust has settled on the fundraising, hire of a new CEO and the completion of the manufacturing base, Plastic Logic will look at a stockmarket float. NASDAQ is still the most likely option, although London had more technology listings than its celebrated American counterpart and suitor last year and is not off the radar.

It’s a decision the firm doesn’t have to make for 18 months or so.

Plastic Logic’s cutting edge technology is allied to an astute commercial focus.

Dr Hauser said: “When we started Acorn, we didn’t understand the concept of impossible so just went and did it. There was great ignorance at the time and a great deal of luck involved in surviving that ignorance with a highly successful business. Now I have a little bit of knowledge under my belt and I have never seen anything like Plastic Logic in terms of future potential.”

Plastic Logic’s displays will enable electronic reader products that are as comfortable and natural to read as paper whether users are on a beach, in a train or relaxing on the sofa. Wireless connectivity will allow users to buy and download a book or pick up the latest edition of a newspaper wherever they are, whenever they need it. The battery will last for thousands of pages.

Simon Jones, the company’s VP of product development, said: “Even in this age of pervasive digital content, our research shows that consumers are very reluctant to read on laptops, phones and PDAs.

“We still carry around enormous amounts of paper. However, people are making less room in their lives for the weight and bulk of paper and are becoming more sensitive to the environmental impact of printing to read.

“We believe there is a substantial unfulfilled need that Plastic Logic can meet by making digital reading a comfortable and pleasurable experience.”