Raydiance raises $20 million

Petaluma startup Raydiance Inc. has raised $20 million in venture capital to launch its laser technology for medical, manufacturing and defense applications, the company said Wednesday.

Super-fast lasers can cut or vaporize material without generating heat, creating new ways to perform surgery, treat tumors or etch exotic materials, according to Raydiance. The technology also could detect and disarm explosives.

The startup has developed high-power desktop laser systems that cost less and are simpler to use than anything on the market, the company said Wednesday.

"Raydiance is pursuing a 'Moore's Law'-like path to develop and bring to market ultrafast lasers that are cheaper, smaller and more powerful with each generation," company president Scott Davison said.

Raydiance launched its first commercial laser last year and is rolling out a second laser platform, Discovery 2.0, with double the power of the original, according to Davison.

"The introduction of the Raydiance Discovery 2.0 system, combined with our recently secured round of funding, not only validates this vision, but also will enable the development of even more game-changing applications powered by Raydiance across a broader range of industries," he said.

Raydiance customers have been using the laser systems to pursue breakthroughs in ophthalmology, dermatology, gene therapy, surgery, homeland security and defense, the company said. The new platform opens opportunities for manufacturing advanced vascular stents and thin-film solar cells, Davison said.

The latest round of financing was led by Florida-based Greenstreet Partners and joined by Draper Fisher Jurvetson, a Menlo Park investment firm that provided early funding for the company. So far, Raydiance has raised $45 million in venture capital.

Raydiance was founded in Florida and moved to Petaluma in December 2006. In the past year, it's grown from about 30 to 55 employees.

The company grew out of a laser research program at the University of Central Florida that was funded by the Defense Department.

Raydiance has received $12 million in federal contracts to test its technology for medical and defense purposes.

The firm's chairman and CEO is Barry Schuler, former CEO of Time Warner's AOL unit. Davison is a veteran software developer who also worked at AOL.

Raydiance leveraged its founders' Internet and software experience to make the lasers small and simple to use, Davison said. They can be controlled from a laptop and installed in any room with a standard electrical outlet, he said.

The original system cost $400,000, but the next-generation system is about $200,000. Raydiance customers pay a monthly fee for the systems, and the company will charge a royalty for future products and procedures that use the technology.

"All of our partners are somewhere in the stage between prototype and early development," Davison said. They should begin commercializing products next year, he said.

The company doesn't release revenue, but the new round of funding should take it to positive cash flow, Davison said.

You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.