Nanotech firm has big aspirations

Cheaper catalytic converters is goal

Lizette Wilson

Nanostellar scored its first funding round to develop a new material that could overhaul the automotive industry.

Based in Menlo Park, the early-stage company secured $3 million -- a small, but crucial bankroll that will enable the 15-person company to hire another three to 10 employees and reach the next milestone of delivering a platinum nano-composite to makers of catalytic converters.

"We want to run a very lean operation," said CEO Michael Pak, who co-founded the company last year. "Completing the product is top priority."

Pak, the former CEO and founder of Xpeed Networks, said Nanostellar will likely create the composite in both liquid and powder form to prepare for both processing methods used by the 1,000-plus catalyst companies now in operation.

The ultimate goal?

Introducing Nanostellar's secret sauce -- which aims to make catalytic conversion cheaper and cleaner by cutting the amount of platinum needed -- to the marketplace by 2005.

Lead investors in the company's first-round funding are 3i, along with two private equity investors: Frank Marshall who was vice president and general manager of Cisco Systems Inc.'s core products business unit, and Dr. William Miller, prior chairman of the board at Borland Software Corp., vice president and provost of Stanford University, and president and CEO of SRI International.

David Aslin, a partner with 3i, will join Nanostellar's board of directors.

Pak estimated the company will need $30 million to $100 million more in venture funding.

"We have big plans, but we have to deliver the deliverables first," he said.

Lizette Wilson covers technology and venture capital for the San Francisco Business Times.