Graphene and Nanotubes – Deja Vu?

I wrote a piece about the rather low graphene market sizes on AZoNano last year since when Applied Graphene Materials have raised a further £8.5 million and Haydale a further £6m. Now Michigan based XG Sciences have announced their intent to raise £16.8 million ( $24 million) via an IPO.

Add that to the operating losses so far of £30 million ($43 million) and the above three companies will have raised a combined £77.3 million ($110 million) to commercialize graphene in a market predicted to be worth £273 million ($390 million) within ten years.   We can probably at least double the investment number by adding all the other graphene producers, some of who have already gone bust, and by the time we add on institutions such as the National Graphene Institute the investment to date probably exceeds the expected market size in a decade’s time.

The precedent for all of this is carbon nanotubes where the gap between expectations and reality were staggering which led to huge over investment in subsequently under utilised capacity. Why? Back in 2001 Fortune magazine ran a piece quoting  market predictions of a hundred billion dollars per year.  Coming down from cloud cuckoo land with a heavy bump however, a recent analysis of the market. “Global Markets and Technologies for Carbon Nanotubes,” estimates a current market size of £117 million ($167 million).

As I discussed in last year’s analysis, if we “factor in the “unknown unknowns”, we arrive at a number between a few hundred million and a few billion dollars’ for graphene depending on what applications it eventually enables.

For the moment, all the action will be in graphene applications not production.  I’d hold off from chucking any more money at graphene production businesses, unless they have something highly unique and compelling, at least until the current wave of fund-raising and subsequent consolidation is over.

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