With the investment, BGF will take a minority stake in the business and will join the board with its Business Director, Mark Bryant.
The company intends to use the proceeds for research and development as well as for sales and marketing efforts.
Founded in 2005 by CEO Dr Graeme Malcolm and Dr Gareth Maker and backed by Scottish Enterprise and Melville Capital, M Squared Lasers designs and manufactures lasers and photonic optical instruments for applications in remote sensing, frontier science, bio-photonics, defence, microscopy, spectroscopy and metrology.
M Squared’s laser based systems can remotely detect and image gas leaks and perform environmental monitoring, for example, identifying the extent and location of a methane leak in the oil and gas industry.
Other remote sensing applications include the detection of explosives, chemicals or pollutants.
The company, which also has an office in San Jose, California, sells lasers to and collaborates with a range of blue chip partners and research institutions across Europe, North America and Asia, including Thales, Philips, Osram, Stanford University and the Max Planck Institute.