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Plastic Logic announces $700M investment to make its plastic e-readers in Russia

Plastic electronics developer Plastic Logic is raising $700 million in funding, the company announced today. The investment will be used in part to build the world’s largest commercial plastic electronics factory in Zelenograd, a Russian city often likened to Silicon Valley.

The factory will be the second for Plastic Logic, a company known for its never-released Que e-reader for business professionals. The device was originally announced at DEMO Fall 2008, and after several production delays, Plastic Logic reported plans in August to cancel the original product and move on to a second generation design. In contrast to other e-readers on the market today, the first generation Que, described as a paperless briefcase, featured an all-plastic design, making it thin, lightweight and able to withstand bending.

Scheduled to open in 2013 or 2014, the new factory will employ more than 300 people and will be able to produce hundreds of thousands of plastic electronic displays per month. Plastic Logic CEO Richard Archuleta said the company plans to manufacture its displays in both the new Zelenograd factory and in Dresden, Germany, where the company’s first factory is located. He said the second generation displays, which Plastic Logic expects to release before the new factory opens, are currently being qualified in Dresden.

Today’s announcement includes an initial equity investment of $150 million from the Russian Corporation of Nanotechnologies (RUSNANO) and a $50 million equity investment from existing investor Oak Investment Partners. Plastic Logic is also in the process of closing $100 million in debt financing, for which RUSNANO will provide partial guarantees, and Archuleta said Plastic Logic expects to raise the remaining $400 million in funding before the factory opens.

Founded in 2000 by researchers at Cambridge University, Plastic Logic has headquarters in Mountain View, Calif. and has already raised more than $200 million in funding from investors including Oak Investment Partners, Intel Capital, Amadeus Capital Partners, Morningside Group and Tudor Investments. RUSNANO was founded in 2007 to foster developments in nanotechnology.