Since setting up Laser Wire Solutions seven years ago, Paul Taylor has grown it to be the fifth fastest growing manufacturing company in the UK. It exports its products all over the world and especially to US tech firms. Here he explains how he has grown his business in a sector tipped to surge over the next few years.
Tell us more about the company and what is its vision?
Laser Wire Solutions is a Welsh company that designs and manufactures laser wire-stripping machines. Based on technology developed for NASA’s Space Shuttle programme, the firm works in a range of sectors including medical, automotive and data communications.
The company was incorporated in October 2011. My PhD thesis was developing an optical atomic clock at the National Physical Laboratory, where I was responsible for developing the laser systems used to trap and probe a single atom of Ytterbium to act as the time reference in the next generation of atomic clocks.
Following my PhD and a stint as a research scientist, I ventured into industry, working in developing and building laser mastering equipment for the CD/DVD industry. In 2005 I was recruited by Spectrum Technologies to develop their range of laser cable marking systems for aerospace, which is where I was first exposed to the cable market and the technique of laser stripping.
Laser Wire Solutions (LWS) was essentially founded to exploit the gap in the market for high-end laser stripping systems for medical device manufacture. My intention was to design and manufacture bespoke machines that could be used to strip hair-fine wires and aerospace cables used in a range of technologically advanced products, such as microwave assemblies, pacemaker coils, medical devices and mobile phones.
Having started out as a two-man band based in a garage in Merthyr Tydfil, Laser Wire Solutions has now grown to be one of Wales’ fastest growing companies. It has trebled its turnover to £5.1 million and doubled its staff headcount to 28 in the last twelve months alone. The company was listed as the fifth fastest growing manufacturing company in Europe in this year’s FT1000 fastest growing companies list.
The company’s products are much sought after by high-tech firms all over the world, particularly in the United States, with 99 per cent of its turnover deriving from exports. Thanks to its international success, the business picked up a Queen’s Award for international trade in April this year.
The company has ambitious expansion plans, aiming to double its turnover in the next two years by extending its range of precision laser wire strippers, adding new capabilities and increasing the availability of its products worldwide.
How much investment has the company raised and where did the money come from?
A £50,564 SMARTCymru grant was awarded to Laser Wire Solutions by the Welsh Government’s innovation team to help the company finance the design and creation of its first machine – a unique laser wire-cutting machine that was unlike anything on the market at the time. The investment in technology provided the company with the machine capability to demonstrate its ability, resulting in it winning its first contract at the end of 2012 supplying a laser wire-stripping machine to a business in France.
This boosted our credibility, helping it to access other financial support in the form of a £275,000 equity investment package from Finance Wales and the Wales Business Angel Network. This funding also allowed the business to move to a new 5,000-square-foot premises in Treforest Industrial Estate, Pontypridd.
In 2015, Laser Wire Solutions used a SMARTCymru research and development grant to develop a range of laser-based wire-stripping products, with a further £4,920 innovation voucher enabling it to develop the robotic motion of laser beams.
In the same year the company received a second wave of investment from Finance Wales and Xenos Business Angels to the tune of £150,000 and also joined the Welsh Government’s Business Wales Accelerated Growth Programme. This programme helped Laser Wire Solutions increase export sales by more than £1 million within a year.
2016 saw strategic partnerships formed as a result of Laser Wire Solutions’ growing reputation in building technologically niche and applications-based products. These partnerships included large multi-national companies, including a leading player in the interconnect component market who has become a key customer, and Schleuniger – a $160 million turnover company and part of the Swiss stock listed group Metall Zug ($10.4 million turnover).
In 2016 Schleuniger acquired a 20 per cent share in Laser Wire Solutions after they decided that a co-operation with Laser Wire Solutions would best position them for the future development of their core automotive market. Particular focus is now being placed on the electric car revolution where a large amount of aluminium cabling is being used which cannot be stripped with a blade as it is too sensitive to nicking and hence laser is the only effective solution.
What was the source of the latest round of investment and how did it come about?
The current wave of UK Innovation funding for Laser Wire Solutions is to develop cutting-edge laser soldering capability for the medical device market at a sub 0.1 mm pitch. Medical device companies are building increasingly miniature precision devices, where high levels of human skill and dexterity dictate the quality of the end product. Laser Wire Solutions’ desire is to develop a more automated precision micro-machining and soldering process that is an alternative for customers that are reliant on human operators.
In addition to this, the company has this year received funding from Rhondda Cynon Taff’s Enterprise Support Programme which was used to invest in the company’s IT infrastructure, both software and hardware.
Many funding contacts were introduced to Laser Wire Solutions via the Accelerated Growth Programme, so we are much indebted to the AGP team.
From start to end, what was involved in the investment process and what do scale-up companies need to be aware of to ensure an efficient fundraise?
The first step is to approach a business investors association, such as Xenos, and express an interest in meeting with potential investors. At the meeting you have the opportunity to make a three-minute pitch, which will be followed by a Q&A session. Interested parties then get to meet with you individually to ‘dig deeper’. A group of investors was then formed, with negotiations led by Finance Wales. A lawyer was subsequently hired, who would be paid upon completion. The lawyer is involved in preparing the paperwork and in settling any disputes between investors. The whole process took six months.
Scale-up companies need to be mindful of the time it takes to follow through the whole funding process and to be willing to be a peace-broker.
What exactly will the money be used for?
The company is currently applying for two consecutive rounds of grant support from RCT’s Enterprise Support Programme. The first is to help finance the expansion of its business premises from 5,000 sq ft to approximately 10,000 ft (by taking on a second industrial unit). This will help build the capacity to take on more business and staff.
The second is to invest in a Materials Resource Planning (MRP) system to optimise its processes and maximise control over costs. After such rapid expansion over a short period of time, the company is still currently working primarily in silos, which it is looking to change. Investing in the business’s infrastructure with an MRP system will enable it to streamline planning and cut down costs, while also improving communication, capacity utilisation, customer services and overhead recovery.
What would you say to scale-up companies seeking to follow the same route of investment?
The best advice is to get on the AGP programme and to never give up! Also, no matter how small a company you are, you need to value your worth. Obviously be realistic – half a pie is better than no pie – but remember that you are selling the company, not giving it away!