Deal in focus: Northstar's Graphene Materials lists on AIM

The issue sees the University of Durham spinout listing a 42% stake on AIM, successfully raising £11m.

AGM has found a way of mass producing the graphite by-product, which is 20 times stronger than diamond and can conduct electricity better than copper. The company's process uses sustainable raw materials, namely carbon atoms sourced from ethanol, meaning AGM does not have to rely on the supply of graphite.

Graphene was isolated in 2004 by Nobel prize-winning scientists Andre Geim and Konstantin Novoselov at Manchester University. The duo made the discovery almost by accident; while their colleagues were studying crystals of graphite by peeling off the graphite's surface with sticky tape to examine what lies beneath, the pair decided to check out the pieces of discarded sticky tape. They found that the thin layer left on the tape – graphene – was worth looking into further.

Due to its strength, light weight and high level of conductivity, the material is currently being tested for various potential uses such as touch screen and medical applications. Meanwhile, the Bill and Melinda Gates Foundation has awarded $100,000 to scientists developing a super-strong, ultra-thin supercondom which uses the material.

The company received £1.2m of funding in February 2012, with £500,000 committed by both the IP Group and the North East Technology Fund (NETF) and a further £200,000 from the Finance for Business North East Proof of Concept Fund (POC), managed by Northstar Ventures.

Prior to that, the POC first supported the company with £100,000 in September 2010, just months after AGM established itself as an independent entity. Stephen Price, investment manager for POC, who led the deal for Northstar, says: "Our original investment thesis was based on the knowledge that there is great demand for a reliable supply of quality graphene but potential users couldn't get hold of large enough quantities to commence meaningful applications development. AGM solves that problem by producing a quality material via a scalable manufacturing process."

Patent pending
Despite winning a Nobel Prize in 2010, the monumental impact of graphene on multiple industries was only recognised by the UK government in October 2011, when George Osborne announced a £50m investment to establish the Institute of Graphene to support the commercialisation of the revolutionary substance. However, this slow reaction was arguably too late. Today there are more than 7,500 graphene-based patents globally, but just 54 of these have been filed in the UK, compared with 2,200 in China and 1,754 in South Korea.

Having been discovered nine years ago in the UK, it is curious that such a powerful revelation has been let slip. However, this could be an issue of quantity over quality. It is important to note that China has set targets for patent applications, aiming to file two million by 2015. Investigations into the patents filed so far, including a study by the European Chamber of Commerce in China, revealed that the high levels of patents are typically of low quality. "The graphene-related patents I've been involved with in the UK are certainly high quality and worthwhile," says Price.

And beyond producing graphene on a large scale, AGM also provides solutions by working with companies and manufacturers that want to use the material in their products. Despite being a relatively simple concept, harnessing the impressive capabilities of graphene demands expert knowledge, and AGM is at hand to co-develop potential new uses.

This deal was originally covered on 20 November 2013

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