LONDON – Plastic Logic, a struggling venture capital backed company, which specializes in organic electronics, is set to receive $700 million in deal backed by Rusnano, the technology investment arm of the Russian state.
It was already known that Rusnano was interested in Plastic Logic with a view to taking the technology to Russia but the size of the proposed investment is unusual. The investment is set to include the creation of the world's largest plastic electronics factory in Zelenograd, Russia, as well as continued investment in Plastic Logic's manufacturing facility in Dresden, Germany, which opened in 2008, and its R&D center in Cambridge, England.
The project is intended to establish a commercial plastic electronics industry in Russia, Plastic Logic said.
Plastic Logic, founded in 2000 by researchers from the Cavendish Laboratory at Cambridge University, has become a leader in the development of organic electronics but was forced to cancel its only product, an e-book reader based on an organic backplane for the display in 2010. The price point selected for the e-reader was undermined by the advance of full-color tablet computers. Plastic Logic said it is now working on a next-generation electronic reader for business applications.
Plastic Logic said that, under the terms of the final agreement with Rusnano, it has received an initial investment package of $300 million. Rusnano (formally the Russian Corporation of Nanotechnologies) is investing $150 million in return for equity in Plastic Logic while lead investor Oak Investment Partners invests an additional $50 million. In addition to the equity investments, Rusnano has agreed to provide partial guarantees for $100 million of debt financing.
Over the next "few years" an additional $400 million in equity and debt will be raised, Plastic Logic added.