By Adena DeMonte

In January, top VCs—including Oak Investment Partners, Amadeus Capital, and hedge fund Tudor Investment Corporation—bet $100 million that Plastic Logic’s electronic paper is the Holy Grail of publishing. 

The big idea behind flexible displays is that they’re literally flexible. Using a printing process to imbed plastic semiconductors into other plastic, the result is a display you can roll up and put in your pocket (just don’t fold, cut, or mutilate). Besides Oak and company, the idea is attractive enough to draw in other investors including heavy-hitters like Intel Capital, Bank of America, BASF Venture Capital, and others.

The reason VCs are betting big is the hope that the U.K.-based plastic semiconductor company can gain first-mover advantage in a market expected to hit $339 million in 2013. It’s small now—iSuppli analyst Jennifer Colegrove says flexible displays had sales of around $5 million in 2006. The problem is that the idea is so new, hardware makers don’t know if customers will want the goods. And no one wants to fire up a production line on spec.

Plastic Logic COO John Mills is determined to break that chicken or egg cycle. He had two choices to get the technology to market—sell Plastic Logic to a big Asian technology company and lose control of the company, or build a production facility of its own. He chose the latter.

The $100 million is earmarked to build a plant in Dresden, in part because Germany subsidizes up to 40 percent of set-up costs. It will also be used to quadruple staff from 56 to more than 200.

Besides money-men, Plastic has other backers. Andrew Hannah, CEO of Pittsburgh, Pennsylvania-based Plextronics, says Plastic’s new funding is a sign that the printed electronics industry is poised for prime time. Of course, since his firm develops organic light-emitting diodes that could be used to illuminate Plastic’s products, he has an interest in the outcome.

Competition for the Cambridge, U.K.-based firm remains in its early stages. The biggest threat is Polymer Vision, which spun off from Royal Philips Electronics in January. Its vision of the future—a 5-inch scrolling electronic paper display—is set for release later this year. Knowing that size matters in the display market, Plastic Logic plans to make its flexible screen bigger.