Why The First YC-Backed Biotech Company May Just Be The Future Of Pharma

Gingko Bioworks sounds kind of like a mad science lab of the future. The Boston-based biotech company is currently working on a project with DARPA to treat antibiotic-resistant germs, using designer microbes to convert CO2 emissions into fuel and is somehow making yeast smell like roses.

Gingko Bioworks co-founder Jason Kelly considers these projects, and many others, the future of the pharmaceutical industry. “The designer organisms we create are solving a supply problem,” he says. “Instead of going to the agriculture industry or pharma we will eventually just use organisms.”

Kelly says this is the main reason he and his co-founders started Gingko while at MIT. The four students began discussing how inefficient it was to program microbes. It was too slow and tedious to make any real dent. It was also a good reason biotech didn’t get the kind of funding that other tech was used to. So they switched things up, added robotics and created the first organism engineering foundry. Their “organism engineers” now take DNA sequencing from nature and basically create designer microbes that can actually replace technology with biology.

The DARPA project is just one example of this. Rather than trying to come up with better antibiotics, Gingko Bioworks is working with DARPA to get at the root of sickness and immunity by manufacturing probiotics that specifically target and remove bacteria with harmful traits – such as antibiotics resistance – while leaving healthy bacteria intact.

It’s also, notably, the first biotech company to be backed by Y Combinator. YC president Sam Altman confirms the seed accelerator has also invested in 4 other soon to be announced biotech companies and that he’d like to see more funding in the biotech space. “We look at three things before deciding to invest in an industry – upcoming hyper growth, costs coming down to series-A scale, and cycle time coming down to something reasonable for a startup,” says Altman. All that has started to happen in biotech.

Though Altman admits YC may be a little earlier than traditional VC firms to get into the biotech space, Google Ventures, Greylock and others also seem to be making more of an investment in these types of companies.

Greylock currently lists WarpDrive Bio, Aveo and Concert Pharmaceuticals in its portfolio. GV’s managing partner, Bill Maris has also said biotech is one of “the brightest spots” to invest in. Maris was once was a biotech portfolio manager at Investor AB and is listed as one of the main brains behind Google’s Calico project. That’s a biotech pet project at Google that focuses on aging and ending death (as in we might never have to die).

Gingko Bioworks and other companies like it touch on changes rapidly coming down the line for myriad industries that affect our daily lives – from the way we create medicine and grow our food and even in cleaning up the air we breathe. This major shift in the last five years in biotech means lower costs, faster time to market, new markets and other things we have only been able to scratch the surface of.