User friendly electronic books on the way after one of Europe’s largest VC deals

Cambridge University spin out Plastic Logic has raised $100 million to finance the construction of the first factory to manufacture plastic electronics on a commercial scale in one of the largest financing deals in the history of European venture capital.

The factory is Europe’s foundation stone of a new era in electronics: portable electronic reader devices are predicted to create a market of 41.6 million units by 2010, while plastic electronics generally are expected to create a broad range of further markets.

The funding is a coup also for Dresden, where the factory will be built. Over the past five years the east German city has established itself as Europe’s stronghold of chip manufacture and won the project after an international beauty parade of possible sites.

The new factory will produce flexible electronic displays for ‘take anywhere, read anywhere’ products. Plastic Logic claims its active-matrix displays that are thin, light and robust; enabling a reading experience closer to paper than any other technology.

The first closing of $100 million of equity finance was led by Oak Investment Partners and Tudor Investment Corporation. Existing investors Amadeus, which led the seed financing of Plastic Logic, Intel Capital, Bank of America, BASF Venture Capital, Quest for Growth and Merifin Capital also participated.

“Plastic Logic has created a pioneering technology that will revolutionise the way that people interact with their media on the move,” said Bandel Carano, Managing Partner at Oak. “This investment is a perfect fit with Oak’s vision of future media interaction through handheld devices.”

The facility will have an initial capacity of more than a million display modules per year and production will start in 2008.

“Our displays will enable electronic reader products that are as comfortable and natural to read as paper whether you’re on a beach, in a train or relaxing on the sofa at home.” said John Mills, Chief Operating Officer.

With wireless network it will be possible to purchase and download a book, or pick up the latest edition of a newspaper wherever you are and whenever you need it. The battery will last for thousands of pages so you can leave your charger at home.

“Even in this age of pervasive digital content, our research shows that consumers are very reluctant to read on laptops, phones and PDAs,” said Simon Jones, Vice President of Product Development at Plastic Logic.

“We still carry around enormous amounts of paper. However, people are making less room in their lives for the weight and bulk of paper and are becoming more sensitive to the environmental impact of printing to read.”