Glasgow-headquartered M Squared has received £3.85 million from the banks backed Business Growth Fund (BGF) to use for its research and development programme as well as its sales and marketing.

BGF, which is backed by five of the UK’s main banking groups including Barclays, HSBC, Lloyds, RBS and Standard Chartered, has so far invested in seven UK companies, with M Squared Lasers the eighth.

M Squared Lasers, which is BGF’s second investment in a business that manufactures its own products, designs and builds lasers and photonic optical instruments for applications in remote sensing, frontier science, bio-photonics and defence.

Its products are used to detect and image gas leaks and to perform monitoring. The business was founded in 2005 by Graeme Malcolm and Gareth Maker.

Malcolm comments, ‘For us this offers real growth potential. BGF’s investment will allow us to further develop our laser technology and fund our sales and marketing efforts. In particular, we are looking at new market opportunities in remote sensing, and will specifically focus on developing our Firefly laser product, which has a clear application for the security and defence, oil and gas, and food and drink industries.’

Maker and Malcolm approached the BGF themselves having looked at a number of different funding options. The company has previously been backed by Scottish Enterprise and Melville Capital. In 2009, it was given a funding boost to expand into the US by Clydesdale Bank through the Enterprise Finance Guarantee scheme.

Duncan Macrae, Edinburgh-based investment director at BGF, says that M Squared’s laser technology is a ‘genuine step change’.

He adds, ‘Customer referencing has been overwhelmingly positive and we are very pleased to be backing such an innovative Scottish business and a first class management team.’

As part of the deal, BGF business director Mark Bryant will join the company’s board as a non-executive director.