Vertex Management Israel managing partner Moshe Shahaf, who was a partner in Formula Ventures until recently, disclosed a Formula Ventures nano-technology investment (the only one so far). For years, Shahaf advised British funds on start-up investments, and took advantage of his agreement with one of the funds, which gave Formula Ventures the chance to invest, together with the British fund, in a company Shahaf was asked to evaluate.
The company, Nanomagnetics, is located in Britain and has no connection with Israel whatsoever. Nanomagnetics uses chemical know-how to solve the well-known electronics problem of storage density on hard discs.
In the current process for manufacturing hard discs, the flat surface constituting the base of the hard disc appears like a forest after a tornado, when viewed from above, i.e. irregularly located high points. This is because in the process of manufacturing a magnetic coating for the surface designed to absorb the massive quantity of files stored, the atoms of the material collide with one another, and the collision fragments create the irregular surface.
In reading the information passing through the hills and valleys, the uneven surface creates electronic noise. Furthermore, some of the fragments stick to the surface and occupy the space of several bits, preventing full use of the area. These problems lead to data reading errors. In order to solve them, the information is stored on a larger than necessary surface, in order to prevent bits from leaking into overlapping locations.
Nanomagnetics, founded three years ago in the University of Bristol basement, uses protein, the material used by the body to hold the hemoglobin that circulates oxygen in the blood. A chemical process is used to insert cobalt-platinum, the material currently used in manufacturing the hard disc coating, into the proteins. Each protein contains eight nano-meters, so the quantity of cobalt-platinum is always identical. These “seeds” of protein containing cobalt-platinum are arranged 12-nano-meters from each other. After the disc coating is finished, a birds-eye view shows concentric circles of seeds at regular intervals.
This successful arrangement prevents bits moving from one place to another. Shahaf explains with this method, up to 100 times more information can be stored, since there is no need to compensate for electronic noise and overlapping bits.
”They already have a small-scale production line,” Shahaf adds. “The CEO is even the former COO of disc manufacturer Seagate Technology. When we consulted him about candidates to manage the company, he offered himself. The company has already raised $12 million, and its market is available almost immediately. The exit is fairly clear, too. It won’t be a disc manufacturer; it will be a chemicals company that supplies raw materials to disc manufacturers. One of the mistakes this company almost made was to attempt an exit with a disc manufacturer, but they realized it would limit their market.”
Published by Israel's Business Arena on March 19, 2002