The size of Russian investment in failed e-reader company Plastic Logic has been revealed, with $700m on the table for a company that has never managed to make a viable product.
Plastic Logic did make a few Que readers, one of which is on display in Churchill College, Cambridge, but delays in production allowed the competition (notably the iPad) to leapfrog the $650 Que despite its engaging technology. With the Que canned, the company was desperately short of money, until the Russians turned up with bundles of cash to invest.
That cash is coming from state-owned nanotechnology corporation RusNano. Last November, when the deal was announced, it wasn't clear how much cash was involved; now we know that a cheque for $150m will be signed imminently, with $100m to follow from the Russians – along with $50m from existing Investor Oak Investment Partners. There's then another $100m in underwritten debt, and $400m available over the next few years, assuming everything goes to plan.
That totals $700m, in addition to the $250m Plastic Logic has already burnt though – all for a company that hasn't sold a single product despite some flashy demonstrations.
The money will go on developing the factory in Zelenograd, Russia, to get production costs down with a view to flogging the Que to a different market – but getting the cost down will be paramount. Plastic Logic also has other products in the pipeline, which is good considering the quantities of money involved.
As we noted back in November, the Russians are interested in Plastic Logic's intellectual property around building electronic circuits in plastic, and are betting that such electronics will be a big deal in the future. As RusNano's MD Georgy Kolpachev puts it:
"This investment signifies the potential that we see in the future of plastic electronics ... Entering this new disruptive segment at the stage of its inception gives Russia a chance to win a leading position in global market of future electronics.”
If he's right, then Russia will become an important force in the manufacture and development of such technologies, if not, then Russia will be several hundred million dollars poorer. ®