There’s a growing wave of commercial activity from companies that are creating products using new biological engineering technologies.
Perhaps the most public (and tastiest) example of the promise biomanufacturing holds is Impossible Foods. The meat replacement company whose ground plants (and bioengineered additives) taste like ground beef just raised another $200 million earlier this month, giving the privately held company a $4 billion valuation.
But Impossible is only the most public face for what’s a growing trend in bioengineering — commercialization. Platform companies like Ginkgo Bioworks and Zymergen that have large libraries of metagenomic data that can be applied to products like industrial chemicals, coatings and films, pesticides and new ways to deliver nutrients to consumers.
The new products coming to market
In fact, by 2021 consumer products made with Zymergen’s bioengineered thin films should be appearing at the Consumer Electronics Show (if there is a Consumer Electronics Show). It’s one of several announcements this year from the billion dollar-valued startup.
In August, Zymergen announced that it was working with herbicide and pesticide manufacturer FMC in a partnership that will see the seven-year-old startup be an engine for product development at the nearly 130-year-old chemical company.
Meanwhile, Ginkgo has taken an approach that focuses on spinning up joint ventures with corporate partners in health care and agriculture to commercialize its discoveries. It’s an approach that has given the Boston-based bioengineering startup a $4 billion valuation of its own.
Behind these multibillion behemoths are a slew of startups that are raising big money to catch the rising biotech boom. They’re making agricultural products, like Joyn Bio (a Ginkgo subsidiary); food and cosmetics ingredients like Perfect Day and Geltor; new chemicals, like Solugen; and new biomaterials for clothing like Bolt Threads’ synthetic spider silk or Mycoworks’ leather replacement made from mushrooms.
In July, Perfect Day revealed the first product that would be made with its milk replacement — a new ice cream brand called Brave Robot.
Big opportunities bring big dollars from investors
In July three companies — Perfect Day, Not Company and Geltor — raised more than $330 million for their respective technologies with a biomanufacturing component.
Investors are taking note. In July, Mayfield Fund announced a new initiative designed to put the firm at the center of the new wave of synthetic biology companies. Poaching the former co-founder of IndieBio, Arvind Gupta, Mayfield refocused its health investment business on both human and planetary health and put bioengineering at the center of its efforts.
“When I’m looking at teams, having a very strong science component and a very strong business-minded component is more important than in your typical IT company,” said Gupta. “In traditional tech companies, you can have one protagonist that you’re investing in, but in engineering bio the team is critical. There’s too much to do and there’s too much risk. You have to build a world-class platform that can build products, but you also need a world-class team to sell those products into the market.”
That means having a team that includes at least one Ph.D. on the team who has experience in the science.
And as biomanufacturing becomes more widely embraced, it will require a number of enabling technologies to move innovation beyond the lab and into commercial production — especially for more complicated products. That’s why some companies like MemBio, which is manufacturing human blood, and Milq, which makes human breast milk, are working on their manufacturing capabilities and their bioproducts in tandem.
“For mammalian cells you want to be able to do gas exchange without disturbing the cell — and that is hard to scale,” says Gupta. “At the small scale it’s all easy, but when you get to very large scales it becomes very very difficult.”
There are still opportunities for companies working at each of the three stages of maximizing production — developing the genetic circuit to make the product, downstream processing and scaling manufacturing, and finally purifying and finalizing a commercial product based on the bioengineered input, says Gupta.
For Seth Bannon, an early-stage venture investor who’s one half of the frontier technology investment fund Fifty Years, there are a few things on the biomanufacturing wish list.
“Our favorite team composition is when a synthetic biologist teams up with a chemical engineer. Why? Synthetic biologists push the boundaries of what’s possible at small scale and chemical engineers think all day about scaling things up,” Bannon said.
“From food to fragrances to therapeutics to chemicals to materials, biomanufacturing will remake many massive industries. As long as the biomanufacturing is bringing real ethical benefit — more sustainable production, ability to improve health, less need for animal suffering — we don’t care about the industry.”
Some of the biomanufacturing companies in Fifty Years’ portfolio include Memphis Meats, Solugen, Geltor, Lygos, VitroLabs, Meati, Tierra Bio and Ansa Bio.
Déjà vu all over again?
For some investors, the recent wave of startups focused on bioengineering may look like a flashback. Nearly a decade ago companies like Sapphire Energy, Solazyme and Amyris Biosciences were all touting their ability to create biological replacements for one of the world’s largest commodity products and its major byproducts — oil and oil-derived petrochemicals.
These companies have disappeared, but their lessons aren’t lost on the new biomanufacturing companies that have cropped up in their wake.
Zymergen co-founder Zach Serber actually worked at Amyris as a scientist in the company’s early days and eventually became its head of biology. “One of the things that both Solazyme and Amyris did was sink a lot of VC dollars into manufacturing,” said Serber. “We knew at the very beginning of Zymergen we weren’t going to go down that path.”
The lessons of the past extend beyond manufacturing capacity and into product development, Serber said. “The key and more fundamental learning from my perspective was the pursuit of non-drop-in replacements.”
Early-stage startup companies face a combination of technical risks, market risks and scaling risks, according to Serber. The mistake of the first wave of startups in the early days of the biotech boom was to try to reduce the wrong set of risks.
Instead of having confidence in the technology’s ability to work at solving unknown problems, these companies tried to reduce their market risk by pursuing existing industries. “The challenge there was a trap,” said Serber. “Those markets were fully occupied by petroleum.”
The observation may serve as a cautionary tale for the companies pursuing markets in the food space, and Zymergen has certainly taken Serber’s lessons to heart. “What we’ve done at Zymergen is taken on market risk with totally unknown chemicals made from nature … and reduced the science and manufacturing risk. And that’s what we’ve spent the last seven-and-a-half years doing.”