A Kansas company backed by Nebraska money is looking to make its mark in an industry most prominent in places like Southern California, the Pacific Northwest, Japan, Taiwan and Germany. Nitride Solutions, which is based in Wichita, Kan. and in June announced a $1.8 million round of funding that included investment from the Nebraska Angels, will be making a special version of wafer, the component that forms the basis of all integrated circuits and is most commonly produced in just a handful of places around the world.
In order for any company like this to take hold in a new area, it is critical that they have access to the correct research talent. Jeremy Jones (below, photo courtesy of Jones), CEO and founder of Nitride Solutions, pointed out how the company’s unique relationship with Kansas State University has helped it so far.
“Our relationship with K-State is critical to our success and one of the main reasons that we kept Nitride in Kansas. K-State is one of three technology centers — the other two being UC Santa Barbara and NC State — that have active research programs in Nitride materials,” Jones said, adding that “K-State’s research is headed by Dr. Jim Edgar (below, photo from ksu.edu), head of the chemical engineering department and a well-known expert in Nitride materials.”
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The company has a close working relationship with Edgar through Jason Schmitt, founder and COO of the company. Schmitt previously founded Kansas Semiconductor, in Manhattan, Kan., a company which served as the precursor to this venture.
In a strictly technical sense, Nitride Solutions is a substrate manufacturer producing aluminum nitride wafers. These wafers are traditionally both very expensive and very useful in applications like ultraviolet (UV) light emitting diodes (LEDs). Nitride Solutions has developed technology that allows it to manufacture these expensive wafers with higher quality while reducing cost several orders of magnitude. The company’s developments could enable revolutionary breakthroughs in water disinfection and power electronics, positioning the company well to capitalize on major trends in water treatment and smart grid applications.
Jones said Nitride Solutions could be shipping representative samples as early as December. These samples are in many ways the integrated circuit equivalent of beta tests. Not everything will be perfect, but you can work out the bugs and get ready to ship the real product.
If you have heard of Jones before, it may have something to do with his involvement in the Pipeline program. He was named the 2010 Pipeline Innovator of the Year, an award Pipeline grants after the conclusion of its annual program for entrepreneurs. More recently, Jones and Nitride Solutions made news with the aforementioned announcement of progress towards their $2 million fundraising goal. With the money Nitride Solutions has raised so far, it has enough capital to acquire the physical equipment required for manufacturing crystals.
However, raising nearly $2 million has been no easy task. Manufacturing semiconductor materials is a capital-intense venture, primarily because of the expensive physical equipment involved, but also because of the high salaries typically required for research and engineering staff. Jones and Nitride Solutions began the process of raising funds as far back as August 2009, which he noted was particularly difficult.
“Raising capital over the past two years, in the midst of the worst economic environment since the Great Depression, has been a huge challenge for us,” Jones said. “Our technology was new to area investors and we were too early-stage for venture capital.”
Ultimately, the company was able to find success by working with multiple regional angel investment groups and through Jones’ experience with Pipeline. “My experience in the Pipeline program, as well as our relationship with Wichita Technology Corp and KTEC (the Kansas Technology Enterprise Corporation), really gave us the guidance, support and contacts that we needed to get through this process,” Jones said. “Assembling this investor group also gave us the credibility to attract a group of West Coast angels who provided the final piece of capital.”
Representing a unique part of the startup community here on the Silicon Prairie, Nitride Solutions hopes to drive future development of new technologies, which could greatly diversify the types of technologies in our local economy. Should the company find success, it would be a significant win that paves the way for other area entrepreneurs and engineers.
