VCs invest in bio-based chemicals

Synbio startups attracted over US$300 million, accounting for 53% of all VC investment in 2016 (through October 11), and three of the top five deals. Fermentation and catalysis had funding shares of 20% and 16%, respectively.

"VCs in 2016 have taken a step back in the value chain to focus on upstream technology platforms such as DNA synthesis-as-a-service and automated genomic engineering and laboratory equipment," said Victor Oh, Lux Research Analyst and lead author of the report titled, "Show Me the Money: Where Is Venture Capital Placing Bets in Bio-based?" "Synbio companies are embracing information technology like BioCAD and BioLIMS to create disruption and to integrate new digital genetic tools like CRISPR gene editing," he added.

Lux Research analysts built a database of companies and investments in the BBMC space. Among their findings:

• Synbio poised to grow bigger. The top five VC investments – Zymergen, Gingko Bioworks, Twist Bioscience, Elevance Renewable Science and Bolt Threads – reveal an emphasis on automating synbio. These five have raised US$430 million in total, and growth of these platforms should lead to even bigger numbers for the segment in 2017.
• Spider silk catches fancy. Spider silk's superior properties over those of conventional fibre materials like nylon and silkworm silk have prompted big deals, like US$82 million for Bolt Threads over the last two years. Japan's Spiber and Germany's AMSilk have also pulled in big deals, and up-and-comers like Araknitek and Spiber Technologies may be up next.
• Low oil hits drop-ins, substitutes. Amid low oil prices, VCs have shifted focus this year to commercialising bio-based products that offer improved performance, not just 'greener' replacements for petro-based compounds. About 80% of VC investment in 2016 was on improved products, as opposed to only 46% from 2010 - 2015.

Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/28122016/vcs-invest-in-bio-based-chemicals/