Business Weekly - Cambridge, UK

Metalysis is one of seven ventures to be hand reared under the auspices of a venture fund partnership announced today by Coller Capital and QinetiQ.

But both Metalysis and QinetiQ could still yet be dragged back into a High Court battle by another University spin-out, British Titanium (BTi) in a scrap over the rights to potentially lucrative metals technology.

Business Weekly understands that BTi is close to raising the required finance to exactly that end. BTi was forced into insolvency proceedings in July last year, collapsing under the weight of a £470k legal bill in the first instalment of the High Court battle

BTi had sub-licenced the technology from the Defence Evaluation and Research Agency (later to become QinetiQ) but this was revoked in December 2005. Metalysis now holds the ‘head licence,’ covering all metals including titanium.

The dispute centres around the ‘FFC Cambridge’ process, which greatly simplifies the process of ‘winning’ metals from their oxide or ore forms, without the need for heating or noxious chemicals.

The co-inventor of the technology, Professor Fray lodged his second official appeal against Cambridge University's decision to hand the license to Metalysis - at BTi's expense -last month. The decision has not yet been delivered.

QinetiQ said it had established the new fund to drive faster growth from its venture portfolio by creating an independent team with exclusive management focus and long term capital commitment.

The fund, which will be structured as a Limited Partnership, managed by an independent investment manager, will have initial assets of £40m.

QinetiQ and Coller Capital will each contribute up to £20m of follow-on funding to accelerate development of the fund's portfolio companies. Depending on the performance of the fund, QinetiQ will own up to 75 per cent of future economic value.

The new fund's portfolio will comprise partial or wholly owned interests in seven venture assets. The others are: Aurix, Omni-ID, QinetiQ Nanomaterials, Quintel Technology, Stingray Geophysical and ZBD Displays.