CO-based COVA Tech. attracts venture capital

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In spite of belt-tightening in the high-tech sector, private-public partnerships are moving commercial and academic research and development to new levels. As COVA Technologies of Colorado Springs discovered, entrepreneurialism is alive and well.
In the past twelve months, COVA Technologies, a five-year old developer of ferroelectric semiconductors, has not only received multiple research and commercialization grants, including a multi-million dollar award from the Advanced Technology Program (ATP) administered by the National Institute of Standards and Technology (NIST), it has also bucked all current economic trends when it was selected in May 2002 for a seed investment from ITU Ventures Colorado.
COVA’s CEO and president, Dr. Fred Gnadinger, recently confirmed that his firm received significant funding from the young venture capital company, consisting of a partnership formed by ITU Ventures and the Colorado Public Employees’ Retirement Association (COPERA). “We were very surprised to learn that we were under consideration,” said Gnadinger, who says that his firm received a call from ITU earlier this spring. “Fortunately what we are doing at COVA by working with the University of Colorado, Colorado Springs, fits ITU Venture’s investment criteria. We are obviously very pleased.”
Jonah Schnel, an ITU Ventures partner, noted that COVA’s ability to acquire government commercialization funding and the marketability of its technology in today’s mobile electronic environment impressed his research team. “Consumers of Smart Cards, cell phones, PDAs and other electronic equipment drive the market for lower cost, high performance, non-volatile technologies. We believe that COVA Technologies is on the right track,” said Schnel.
According to Schnel, ITU Ventures Colorado actively seeks companies that are working in partnership with universities around the country to generate the dynamic technologies of tomorrow. “Two years ago, ITU Ventures raised $35 million in capital, and our goal was to invest in new technology R & D affiliated with major university research labs at schools like Cal Tech, Georgia Tech, Stanford and UCLA,” said Schnel. “As we studied Colorado, some interesting metrics appeared. Almost one-half billion dollars is budgeted by the state for universities – but the state as a whole does a relatively poor job of technology transfer. In contrast, however, we also saw a lot of support from the Governor’s office promoting innovation, so we decided to pursue the opportunities that we identified here.”
Schnel explains that his firm contacted the Colorado Public Employees’ Retirement Association (COPERA), one of the country’s strongest financial investment funds, and negotiated a joint venture aimed at funding university-affiliated technology development in the state. “Together,” he said, “we have put together $11 million in venture capital and have invested in two companies so far. COVA Technologies is just the second firm to receive funding from our partnership. We believe that based on Colorado’s concentration of technology-based companies and government support for university research, the state could become as prominent as Massachusetts or California for technology transfer.”
COVA Technology’s team was assembled by Dr. Gnadinger in 1996. The company’s products will enable ferroelectric memories with dramatic reductions in memory cell size and manufacturing cost. This technology and advanced design, says Schnel, will leapfrog current ferroelectric by using very small single ferroelectric transistor (1T) memory cells in place of the much larger ferroelectric capacitor (1T/1C) memory cells in use today (produced by companies such as INTEL, Motorola and others). The new cells may be produced at low voltage with expected long data retention times, says Gnadinger.
Schnel says that ITU Ventures receives hundreds of unsolicited requests for venture capital funding annually. “We have extremely tight criteria,” he notes, “and we are thrilled to be working with COVA and its principals to commercialize this breakthrough technology.”