VCs invest $ 5.8 bn in bio-based chemicals start-ups globally: Study

“VCs in 2016 have taken a step back in the value chain to focus on upstream technology platforms like DNA synthesis-as-a-service and automated genomic engineering and lab equipment. Synbio companies are embracing information technology like BioCAD and BioLIMS to create disruption and to integrate new digital genetic tools like CRISPR gene editing,” 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?’.

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 $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 $ 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.

According to Lux Research, 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 percent of VC investment in 2016 was on improved products, as opposed to only 46 percent from 2010 to 2015.