Industrial Laser Solutions

U. Michigan's Frankel Fund leads nLIGHT's acquisition of Arbor Photonics

Jan. 17, 2013

This deal will allow the fund, which first invested in Arbor, a U. of Michigan spinoff, in 2007, to own stock in nLIGHT.

The Frankel Commercialization Fund, in collaboration with The Samuel Zell and Robert Lurie Institute for Entrepreneurial Studies at the U. of Michigan Ross School of Business, announced that Arbor Photonics has been acquired by nLIGHT Corp.

In a release dated Jan. 14, the Institute said that Arbor Photonics offers a scalable, optical fiber technology that provides high power laser solutions that increase productivity and enable new capabilities for laser materials processing and defense applications.

Arbor Photonics is a U. of Michigan spinoff whose technology originated within the Department of Electrical Engineering and Computer Science and was led by Phillip Amaya. Arbor Photonics' patented 3C® fiber technology enables state-of-the-art high power fiber lasers that can be used in a wide range of new material processing, defense, and medical applications.

The Frankel Fund first invested in the company in 2007, and, as a result of this acquisition, the fund will now own stock in nLIGHT.

The investment in Arbor Photonics was the first made by the Frankel Commercialization Fund, a pre-seed fund established to identify and accelerate the commercialization of ideas generated within and around the university community.

The fund contributed $85,000 to the initial round of financing, which was led by Ann Arbor-based RPM Ventures. The company also secured $2 million from the state of Michigan through economic development programs sponsored by the Michigan Economic Development Corp.

This money was leveraged for critical initiatives to take the company to the next level, including customer identification, prototype development, and the development of engineering and manufacturing plans for the company.

The Wolverine Venture Fund, the university's venture stage investment fund, has also invested in the company, participating in the company's Series A round of financing in 2009.

"Our students have been exposed to tremendous experiences through the course of our relationship with Arbor Photonics," said Thomas Porter, managing director of the Frankel Commercialization Fund and executive in residence at the Institute.

Amaya said, "The Frankel Fund played a critical role in Arbor Photonics' growth. They have been with us almost every step of the way, from first commercializing the technology with their first investment, through building the team and further developing the product."

The Zell Lurie Institute pioneered the concept of student-led venture funds, and for more than a decade has provided MBA students with real-world investing experience. The Frankel Fund, established by University of Michigan alumni Stanley Frankel, together with the Wolverine and Social Venture funds, make up a trifecta of funds that now have more than $6.5 million under management and deliver returns comparable to top professionally managed funds. The funds, along with coursework, internships, Dare to Dream grants, and Michigan Business Challenge business plan competition, comprise the Institute's program portfolio.