Why We’re Excited about Synthetic Biology
Leveraging the Stuff of Life to Build the Climate-Friendly Factories of the Future
If you read my recent post on Better Ventures 3.0, you’ll know that with our third fund we’re doubling down on mission-driven founders leveraging breakthrough innovations in science and technology to solve the world’s biggest problems. One investment theme we’re increasingly excited about is synthetic biology, due to its potential to replace carbon emitting production methods for a number of products reliant on fossil fuels, from food and materials to therapeutics and petrochemicals. We’ve made two recent investments in this space — in Pow Genetic Solutions and Debut Bio — which I’ll get to shortly.
While synthetic biology isn’t new, its potential as a means for scalable and sustainable production has been dramatically enhanced by the recent breakthrough innovations of low-cost DNA sequencing and gene editing tools such as CRISPR-Cas9. Thanks to the precipitous drop in the cost of sequencing DNA, scientists now have access to the genomes of countless organisms, providing them with an extensive library of reaction pathways needed for desired molecular outcomes. And with CRISPR gene editing tools, these pathways can now be easily programmed into microorganisms to turn them into min-factories converting cheap feedstock (usually sugar) into many value-added products.
Low-cost DNA sequencing: the cost of whole human genome sequencing has dropped precipitously, from $2.7B in 2003 (cumulatively) to under $1,000 today, a reduction far outpacing Moore’s Law.
Alt protein as a gateway to synbio
We became interested in synthetic biology via investments we made in the alternative protein space including Mission Barns (cultivated animal fat) and Emergy Foods (fungi-based meats under the brand Meati). Both companies rely on bio-manufacturing as a means of production. In the case of Mission Barns, the company is growing animal fat cells in bioreactors, encouraging their growth by feeding them a nutrient mix known as media and then harvesting once the cells reach the desired density. For Emergy, the company uses mycelium-based fermentation (mycelium are found in the roots of mushrooms and are responsible for the rapid growth or “fruiting” of mushrooms) to grow a fibrous and nutrient rich meat-like texture in bioreactors, similar to the way beer is brewed. As an aside, if you’re interested in learning more about mycelium, see Paul Stamets’ excellent TED Talk on Six Ways Mushrooms Can Save the World (and for a more dystopian narrative on the unchecked growth of evil mycelium, be sure to check out Netflix’ Stranger Things).
As we dug in with these companies, it became clear that in order to produce at scale and achieve the desired price points in the market — especially in the case of cultivated meat — better bio-manufacturing scale-up technologies are needed. That got us researching investment opportunities in “picks and shovels” platform technologies focused on bio-manufacturing production scale-up and led to my deep dive into the synbio space (including a trip to UC San Diego for a three-day Microbial Fermentation workshop and a field trip to the beer-brewing yeast geeks at White Labs).
What’s become clear is that we’re in the midst of a synbio and fermentation revolution. After the boom and bust cycle of the biofuels industry from the early 2000's to 2014–2015, there are now many indications that we are in the beginning stages of a new rise in synthetic biology and the use of microbial fermentation and mammalian cell cultivation to sustainably produce new products, from fragrances and flavorings to specialty chemicals and alternative protein. As mentioned earlier, this growth has been enabled by low-cost DNA sequencing and gene editing, which make possible the harnessing and programming of microorganisms to produce value-added products sustainably and at scale.
The synthetic biology market
Synthetic biology is a large and rapidly growing market that is attracting a lot of investor attention. The estimated market sizes for industrial (non-bio-pharmaceuticals) synthetic biology are large: bio-ethanol ($69B), synthetic food ($13B), fine chemicals ($202B), specialty enzymes ($6.5B), and biopolymers ($6.7B). An excellent in-depth Economist article on synthetic biology from 2019 quotes market sizes from Bioeconomy Capital, which estimates the industrial biotech market at a much larger $147B, and at $338B for all of synbio inclusive of food & agriculture ($104B) and biopharmaceuticals ($137B). The growth of synbio hasn’t escaped attention from investors: in Q2 2019 alone, 37 companies raised $1.2B, following a total of $3.8B invested in 2018 according to SynBioBeta.
Given the complexity of bio-manufacturing, there has been a proliferation of companies up and down the synbio “stack” that now provide customers with a range of services from microbial strain engineering (Zymergen and Ginkgo Bioworks) to enzyme design (Arzeda and Codexis) to fermentation optimization (Culture Biosciences). Here is a great depiction of the stack from an excellent synbio industry report put together by our friends at Bee Partners):
Image courtesy of Kira Noodleman of Bee Partners
This specialization of services is necessary because bio-manufacturing output is highly dependent upon a number of variables — including titer, rate, and yield (aka “TRY”) — that need to be optimized to produce a quality product cost effectively and at scale. Services provided by these companies have given rise to a new generation of synbio startups that can now outsource some of the most capital-intensive parts of their value chain, akin to what AWS did for web startups. With a number of companies now focused on microbe selection, strain engineering, and fermentation optimization, we see an opportunity in the stack for companies addressing bio-manufacturing scale-up, which offers both economic advantages and environmental benefits over the status quo. This is where we’ve made our first two investments in the category.
Our investments in Pow and Debut
Our first investment is in a UC Berkeley-based startup called Pow Genetic Solutions, which we co-invested in alongside Bee Partners and Cantos Ventures. Pow’s vision is to transform the landscape of bio-manufacturing by leveraging revolutionary biotechnology to enable environmentally sustainable and financially feasible continuous bio-manufacturing. The company was co-founded by Ouwei Wang, Shannon Hall, and Charlie Emrich, who together bring a great mix of technological and scientific knowhow along with industry experience from Bio-Rad and Novozymes. Pow has developed an innovative solution to contamination control in fermentation processes that has the potential to enable the migration from batch-fed processing to continuous production, leading to significant improvements in yield.
One of the major barriers to continuous production is mitigating contamination, which typically requires that bioreactors be completely emptied out and cleaned after each batch harvest. Pow’s innovative solution involves editing the fermentation host (i.e. yeast or E.coli) so that it is resistant to biocide and then adding biocide (i.e. chlorite) into the fermentation process to kill off any potential contamination while not disrupting the host or production. This approach enables fermentation to continue beyond the initial batch, keeping production at a high level of cell density and enabling multiple harvests to occur without the need to start over from scratch each time. Pow’s breakthrough enables order of magnitude increases in production yield and helps innovators in this category scale to meet demand in the market.
Our second synbio investment is in Debut Biotech, a San Diego-based startup that is developing an innovative approach to continuous flow bio-manufacturing using cell-free systems. Cell-free bio-manufacturing is an emerging concept in synbio (for more on the topic, check out this great Economist article) that relies only on the enzymes within the cell rather than using the whole cell for production. The advantages of cell-free over whole-cell fermentation include lower energy consumption, less waste, and eliminating the risk of strain migration over time. Debut’s approach involves purifying enzymes from cells, immobilizing them, and then placing them into cartridges that are used in continuous flow systems. The substrate (i.e. glucose) flows through the cartridges, each of which mimics the desired conversion pathway, and is converted into high-value outputs such as therapeutics.
Debut’s cell-free approach enables the production of a wide range of products — from small and large molecule therapeutics to proteins and food additives — in a more cost effective and environmentally sustainable way compared to traditional means of production and even whole-cell fermentation. The company is currently focused on transforming glucose into therapeutic natural products and specialty chemicals. Debut was co-founded by Josh Britton, based upon his PhD and postdoc work in Gregory Weiss’ lab at UC Irvine, along with Brady Beauchamp, a former Navy submarine officer and banker at Goldman Sachs. We invested in Debut’s $2.6M seed round, which was led by KdT Ventures, a leading early stage firm focused on synbio.
What’s next: computational bio and bio-materials
As we continue to dig into the synbio space, we will look to identify more interesting “picks and shovels” platform technologies that will enable — and benefit from — the rise of a new generation of companies utilizing bio-manufacturing as a means of production. Now that we’ve invested in two startups focused on the move to continuous production, we’re now on the lookout for startups leveraging computational biology to automate additional elements of the synbio stack that aren’t currently being addressed.
Additionally, on the application side, we’re looking for investments in the bio-materials space, particularly in sustainable textiles, as we see a big role that synbio can play in significantly reducing the impact of this notoriously resource intensive category. Synthetic biology offers great potential to build the climate-friendly factories of the future, and we look forward to meeting more mission-driven founders building innovative startups in this exciting category.
