After 22 years in business, a Golden-based manufacturer recently raised its first round of outside capital.
Vescent, which manufactures devices to enable the commercialization of quantum technology, closed a $5 million seed round earlier this month.
Quantum is the physics of the very small and the very cold. When you reach this state, the universe behaves in a very different way, Vescent CEO and co-founder Scott Davis said.
Quantum technology can store more information and solve complex problems that are difficult, if not impossible, to solve. This technology can be used to create more accurate clocks, computers to solve difficult problems, sensing devices and more. It can also be used to stabilize financial markets and end infectious diseases.
“If you can engineer systems that can harness that weirdness and exploit it in our macroscopic human scale of dimensions and temperatures, you can do amazing things,” Davis told Colorado Inno. “But in order to do that, the vast majority of the systems out there need lasers and need photons that are really, really special. ... So we create systems that wrangle the photons to basically allow our customers to build systems that harness this quantum weirdness.”
Vescent is a cashflow-positive manufacturing company operating in the quantum space shepherding products from quantum scientists into manufacturing.
It manufactures frequency combs, lasers and controls. Vescent primarily sells these devices to scientists and research labs — including the MIT Lincoln Laboratory in Colorado Springs, NASA and Sandia National Laboratories in New Mexico — and department of defense contractors such as Lockheed Martin, Northrop Grumman and Raytheon. It also works with and sells to quantum startups.
Vescent began in 2002 in Davis’s garage as Vescent Photonics developing a photonic integrated circuit.
Having worked in the quantum space and laser stabilization at places like JILA in Boulder and the National Institute of Standards & Technology in Maryland, Davis said people kept asking questions about quantum technology.
Davis said he and his co-founders Scott Rommel and Mike Anderson wanted Vescent Photonics to be a manufacturing company. So while they worked to develop the photonic integrated circuit, they also had what Davis called a side hustle making controllers and lasers to support the quantum research and development community.
“That helped pay the bills,” Davis said. “It also got us going on our manufacturing chops.”
Eventually, the company developed a functional photonic integrated circuit and a non-mechanical scanning LiDAR. LiDARs, which stands for light detection and ranging, use lasers to remotely sense objects or surfaces. This technology is used in autonomous vehicles.
In November 2016, Vescent Photonics sold its LiDAR technology to Analog Devices for “tens of millions of dollars,” Davis said.
Analog Devices didn’t want any of the technology or products Vescent Photonics manufactured as part of its quantum portfolio, so Vescent Photonics spun that out as Vescent.
Davis and Rommel worked for Analog Devices for about three years before coming back to Vescent.
When Davis and Rommel returned to Vescent as CEO and COO, respectively, the company had 15 employees and its annual revenue sat at $3 million. Today, the Golden-based company has 50 employees and does about $1 million a month in revenue.
When you grow that fast, you’re “sort of on the backs of your skis” playing catch up, Davis said.
After 22 years in business, Vescent decided to raise outside capital to accelerate the growth it’s already experiencing and keep up with customer demand.
Davis said the company is similar to Intel in that the products it makes are found in several items sold by other businesses.
“I love that positioning,” he said. “It gives us visibility into where the market is going.”
The $5 million seed round was led by Corporate Fuel, a New York investment bank, with participation from Boulder-based investment firm Caruso Ventures.
“Vescent’s got this really special position to know where the markets going,” said Russ Fein, managing partner of Corporate Fuel’s investment. “... To be at a company where we can sort of see ... the future unfolding maybe before other people, I thought that was a great place to be.”
As part of the investment, Fein joined Vescent as a board member and the company’s chief financial officer.
Vescent isn’t the only local quantum company to have raised funds in recent months. Denver-based Maybell Quantum Industries pulled in a $25 million Series A earlier this month and Broomfield-based Quantinuum secured $300 million in January.
These quantum capital raises come shortly after Colorado and the Mountain West region were named by the federal government as a quantum tech hub. This designation can unlock more than $2 billion for the region and state’s quantum ecosystem in future years.
