Antioch California-based, NanoMuscle Inc, a growth leader in next generation motors, has created silent and affordable motion solutions for industries such as toys and automotive. The Company was founded in 1998 by CEO Rod MacGregor, a serial entrepreneur from Scotland who had previously founded three other successful companies focused on disruptive technologies. Rod’s proven track record was a key motivator for Ariadne Capital to engage with NanoMuscle to help them secure $16 million in investment capital this year.

When Ariadne met with NanoMuscle in 2002, the company had already had early success selling into the major toy manufacturers in the US and Asian markets. However, the company wanted to step up its global expansion, focusing on the automotive industry, with initial interest in Europe. NanoMuscle recognised that attracting European investors would be an important factor in helping the company quickly develop a footprint in Europe – especially attractive given the strength of the European automotive industry, internationally recognized for design leadership.

Starting in late 2002, Ariadne began talking to target venture capital firms and strategic investors in Europe. The positioning of the proposition was crucial: many potential investors initially questioned why a US firm would be looking for financing in Europe. However, by clearly demonstrating the potential of the technology, the track record of the management team, and the strategic reasons for wanting to enter the European market, Ariadne was able to help build European investor interest and leverage its strong relationships to move towards securing viable term sheets.

Once investors recognized the market potential and solutions that NanoMuscle solved, they were eager to invest and partner. Ariadne helped NanoMuscle decide which interested investors from Europe would compliment the overwhelming interest from the United States.

“NanoMuscle disrupts a 150-year-old motor industry in need of innovation by offering a silent and more affordable alternative to conventional motors”, said Bundeep Singh Rangar, Ariadne Capital’s COO, who led the deal. “We helped find the most strategic investors and partners to help with its international expansion into new target industries.” Within three months, a term sheet from Volkswagen AG’s corporate venturing unit was obtained – its first investment ever outside Germany. Fund raising continued in 2003, attracting France’s Schneider Electric among others – again, the first time this corporate had invested outside its home market. By July 2003, $16 million had been raised in an oversubscribed Series C round.