Tech Investors Bet on Synthetic Biology Once Hesitant, Silicon Valley Venture Capitalists Are Warming to the Idea of Engineered Cells

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BUSINESS Tech investors bet on synthetic biology Once hesitant, Silicon Valley venture capitalists are warming to the idea of engineered cells.

BY ERIKA CHECK HAYDEN MONEY FOR MICROBES Investments in synthetic-biology start-ups have increased dramatically in the past three years. Much of the n 2012, Emily Leproust was trying to raise funding comes from prominent technology investors. money to start Twist Bioscience, a company that aimed to synthesize DNA more COMPANY YEAR FOUNDED BUSINESS TOTAL FUNDS (US$) NOTABLE INVESTORS Iquickly and more cheaply than existing meth- Twist 2013 DNA synthesis $82.11 million Yuri Milner (Internet- ods allowed. But many investors were spooked Bioscience company investor) by the perception that synthetic biology — the Zymergen 2013 Microbial-strain $44 million Obvious Ventures; Eric engineering of microorganisms to make useful optimization Schmidt (Alphabet executive chairman) products such as drugs, food ingredients and materials — would not turn a profit. “It was a Ginkgo 2008 Microbial $54.12 million Matt Ocko (Facebook and lonely time,” Leproust recalls. Bioworks engineering Zynga investor) Three years later, Silicon Valley’s big fish — Bolt Threads 2009 High- $40 million Peter Thiel and Max performance Levchin (PayPal technology investors with billions of dollars at fibres co-founders) their disposal — have finally ventured into syn- Transcriptic 2012 Robotics for $14.37 million Jerry Yang (Yahoo thetic biology’s small pond. Scared away from biology labs co-founder) conventional biotechnology in past by the risky Riffyn 2014 Software $1.8 million O’Reilly AlphaTech and expensive prospect of drug development, Ventures they are now lured by what they see as synthetic biology’s huge market potential, plummeting Emerald 2010 Technology $34 million Peter Thiel and Max Therapeutics platforms Levchin SOURCE: CRUNCHBASE.COM operating costs, improved business models and an increasing emphasis on computing. “The toolkit is evolved from where it was two of SynBioBeta industry group (see ‘Money for Microbes, which aims to engineer yeast that years ago; synthetic biology is going through a microbes’). Overall, 24 newly created synthetic- can synthesize chemicals using methane as a digitization and automation,” says Nan Li, prin- biology companies have raised funding in 2015, raw material. Bolt Threads in Emeryville, for cipal at investment firm Obvious Ventures in compared to fewer than 6 in 2012. example, is making fabrics from yeast by engi- San Francisco, California. Li has coined the Much of the work that goes into developing neering the cells’ metabolic pathways to mimic term ‘biobiotics’ for the current state of syn- a synthetic-biology product is shifting to com- the processes used by spiders to make silk. thetic biology. “We see that this looks a lot more puters and robots. This means that as the sector Other companies aim to use microorgan- like a data and software problem, and we can grows, every dollar invested can produce more isms to make rubber, egg proteins, rhino horn, understand that and get excited about that.” progress. “That reduces the cost for the venture vanilla flavouring, rose-scented extract or cof- Software tools and robotics have reduced the capitalist who is having to put up the money,” fee more cheaply, more ethically or of higher cost of all parts of the process, from creating a says Matt Ocko, co-managing partner of the quality. For example, coffee fermented by engi- genetic ‘program’ to inserting it into a microbe Data Collective fund and one of several inves- neered microbes could replace a high-end brew and testing it in the lab. For instance, synthetic- tors who will speak at the SynBioBeta industry made with beans harvested from civet faeces biology start-up firm conference in San Francisco on 4–6 November. under conditions that some consider inhumane. Zymergen in Emery- Long term, synthetic-biology businesses have ville, California, uses “Synthetic PAST MISTAKES the potential to achieve something more mean- machine learning biology is going The new generation of synthetic-biology ingful — and profitable — than another social- — computer algo- through a companies also has the advantage of experience. media site or cloud-storage service, says Jason rithms that evolve in digitization and Many of today’s founders are alumni of firms Kelly, co-founder of microbial-engineering response to data — to automation.” that struggled because they set their sights on company Ginkgo Bioworks in Boston, Massa- guide the engineering huge, highly regulated industries that were hard chusetts. Like electric-car maker Tesla or com- of fungi and bacteria that perform industrial to break into — such as pharmaceuticals or fuel. mercial spacecraft company SpaceX, he says, processes more efficiently. The company also Now, by contrast, start-up companies are synthetic biology could revolutionize economic depends heavily on robotic automation of its focusing on niche areas where they can quickly sectors that are ripe for innovation — or even labs, reducing the need to pay human workers. bring products to market, such as speciality create new industries. Zymergen and Twist Bioscience are among a chemical, food, cosmetics and clothing indus- Li concurs. “As we understand more about global class of synthetic-biology firms that have tries — while hoping that opportunities will the biology and limitations of these microbes, raised a record-breaking US$560.7 million this emerge to tackle other, bigger targets. there’s a potential to create entire new product year, including $227 million for companies that “People have come up with much more clever categories,” he says. “A lot of limitations that use the wildly popular CRISPR/Cas9 gene- ways of generating revenue much faster,” says we take for granted can be stretched or pushed; editing technology, says John Cumbers, founder Derek Greenfield, a co-founder of Industrial there’s just a lot more levers to pull.” ■