Cymbet Corp., an Elk River company that makes tiny, long-life batteries for sensors, medical devices and other microelectronic systems, will announce next week a $20 million cash infusion that it will use to pay down debt, accelerate U.S. production and expand globally by the end of 2014.
“We are still not a big name in the industry,” CEO Bill Priesmeyer said of the 10-year-old company that has evolved from a scientist’s idea to commercialization. “Most of our competition is in Asia. Now we have the financial resources to ramp up the business.”
The $20 million equity investment, which brings Cymbet’s total equity investment to about $80 million, was provided by U.S.-based Island Shore Investments.
And it came at a critical time. Three years ago, Cymbet raised its largest round of $30 million in equity financing. That was led by Perseus, a private equity firm that also provided some loans. However, anticipated capital for a then-planned 2012 production expansion dried up when the founder of Perseus got sick and died last year.
Perseus declined to commit to additional financing after Cymbet invested in additional plant and equipment, forcing Cymbet to cut back last year until it could find other capital.
“We really drained our inventory to survive, but we’re now going to have a gentle ramp-up in the second half of this year and we think we will have a very nice 2014 that will turn us cash flow-positive and we hope to double sales annually for the foreseeable future,” Priesmeyer said.
He added that sales should be in the “tens of millions” of dollars next year but less than $50 million.
Priesmeyer said low-profile Island Shore, which lacks a website, “is made up of successful individuals in the semiconductor business, and they are great partners for us because they understand what they are doing and can help us outside the U.S. where a lot electronic components are used.”
Cymbet, which employs 40 people at a headquarters, research center and test plant in Elk River, has developed rechargeable silicon energy chips designed to supplant larger, less efficient coin cells and other batteries as backup or primary power sources. Cymbet’s chips are made to outlast the sensors, consumer electronics, avionics and other equipment they power.
Cymbet used much of the capital it raised in the $30 million round in 2010 to contract with X-FAB, the big semiconductor contract manufacturer, to build out factory space in Lubbock, Texas.
Priesmeyer said that facility should grow from about 10 workers to 50 or more over “the next few years.”
He said an unspecified number of engineers and other employees also will be added in Elk River.
Cymbet was conceived by a onetime Honeywell scientist, based on technology developed by federal researchers at Tennessee’s Oak Ridge Laboratory.