RUSH TO MARKET IN NANOSENSORS, BUT MOST AREN’T "NANO"

Lux Research: True nano-enabled sensors are rare; while size-dependent properties create dramatically improved devices, "good enough" existing alternatives limit opportunity . Nanosensors have been pushed forward as a key early nanotechnology application, with boosters projecting billions of dollars in market opportunity. Sensors happen to be among the simplest electronic devices one can make from nanomaterials, yielding an abundance of development activity. But of 66 companies claiming to offer nanosensors, only 13 actually harness the size-dependent properties of nanomaterials. Nanosensors as devices that employ nanomaterials, exploiting novel size-dependent properties, to detect gases, chemicals, biological agents, electric fields, light, heat, or other targets. Plenty of investment has gone into nanosensor companies; in March, for example, Nanomix received $16 million in Series C funding, primarily to move a disposable respiratory sensor to market. Homeland security spending has served as a potent catalyst: the $41 billion U.S. homeland security budget – and the creation of centers like MIT’s Institute for Soldier Nanotechnologies, a $50 million research collaboration with the U.S. Army – has convinced entrepreneurs that a large addressable market lies on the other side of a working nanosensor. Nanosensors deliver sensitivity orders of magnitude better than conventional devices,. But today’s nanosensors aren’t ready for prime time. Until sample handling and selectivity issues are resolved, nanosensors can be deployed only under highly controlled conditions. Plus, costs are high and unlikely to fall in the near term. The mass markets that could deliver enough volume to bring prices down won’t adopt until sensors are cheaper, and the sensors won’t be cheaper until they’re produced in greater volume. Thus nanosensor players are aiming at military projects, where price is less of an issue, to break the cycle."

For the report, Lux Research constructed an assessment tool categorizing 66 companies identified as offering nanosensors.

1. • Companies are developing nanosensor products based on proof-of-concept tests performed in tightly controlled lab settings. Under these conditions, research scientists often carefully deliver sample material to their nanosensors, which dutifully detect those materials at incredible levels of sensitivity down to parts per billion. This proof of concept says little about real-world utility.

2. • Breakthrough decreases in nanomaterial costs required to make nanosensors competitive with existing technology lie two to five years away – a long time for a venture-backed start-up.

3. • Nanosensors’ performance advantages of fast response time, sensitivity, and portability may not be able to displace "good-enough" technologies in existing applications, but they may succeed at putting sensors in new applications that conventional sensors can’t touch.

4. • The best prospects for nanosensor start-ups lie in finding new markets for sensors uniquely enabled by nanotechnology, for example, where conventional sensors are too large, require too much power, or can’t go wireless.

Putting the ‘Nano’ in Nanosensors. Publ 20050526