Evolving Landscape in Industrial Biotech

Leo Zhang

Many regular readers of our blogs may recall the slew of mega deals in the Industrial Biotech sector around the 2006 time frame. Fast forward to 10 years later, such hype has certainly ceased, as evidenced by the withdrawal of many institutional investors in this space, as well as the write-offs of multiple companies that were once poised to disrupt the petroleum industry. When global oil prices dropped below $40/barrel, compounding the challenging task of scaling up a technology within a commodity-based industry, many companies resorted to developing higher-valued chemical products as a way to sustain their operations.

Industry consolidation

Given the limited market potential, it is no surprise to see the industry consolidate through mergers & acquisitions (M&A). Over the past half year, we have seen a number of M&A activities that combined forces of complementary companies for another push towards successful commercialization of their respective technologies. A few illustrative examples are listed below:

  1. Global Bioenergies in December 2016 purchased all shares of a young startup, Syngip, to diversify its feedstock sources beyond glucose, which Syngip’s carbon gas-to-chemical platform is able to achieve.
  2. Avantium in January 2017 acquired the assets of Liquid Light to supplement its technology platform.
  3. In January 2017, Ginkgo Bioworks acquired Gen9 to further advance its genetic engineering technology.

A shifting investment scene

Despite an industry consolidation, we have started to see a new wave of venture activities in industrial biotech. No longer do we see multi-million steel plants written in business plans, but instead, we see companies evolving toward platform technologies in areas such as bioinformatics and gene editing. Such change makes sense, especially to venture investors, as it shields them from any scale-up risk associated with the development of production plants. A few illustrative examples of such shift are shown below:

  1. Synthego, a developer of genome engineering solution, raised a $41 million Series B round from multiple venture investors in January 2017.
  2. Zymergen in 4Q 2016 raised a mega $130 million Series B round as the company scales up its microbial strain development platform.

Share your views on the industrial biotech sector, either in the comments section below, or email us at research@cleantech.com.

Join us at our upcoming 2017 Cleantech Forum Europe (May 16-18) in Helsinki, as we will be hosting a session centered on industrial biotech.


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  • SteveW

    Leo – good summary of recent news. I’d also highlight the commercialization-related results, e.g.:
    1. Genomatica: Their partner and licensee, Novamont, just opened the world’s first commercial-scale plant for the production of a major intermediate chemical. They used Genomatica’s process technology to build a 30,000 ton per year plant (expanded from original 18,000 ton plan due to expected demand and seeing how well the technology was working). Grand opening at end of September 2016; has already produced thousands of tons of in-spec product that has been used to make real products (like compostable, renewably-sourced plastic bags and coffee capsules) – a remarkably fast, smooth startup. Very significant for the industry.
    2. Avantium: valuable partnership and agreements with BASF for new plastics; recently filed for IPO on European markets. Again, significant.
    3. DuPont: At ABLC conference last week, they disclosed that their bio-PDO business is now $300M per year, profitable, and expected to grow 20% next year. While it took a while to get to that point, it shows that there is real interest in chemicals that allow more sustainable end-products.
    Disclosure: I consult with Genomatica; and consulted with Liquid Light (acquired by Avantium).