VCs Invest $5.8 Billion in Bio-based Chemicals – focus shifts to synbio

In Massachusetts, Lux Research reports in ““Show Me the Money: Where Is Venture Capital Placing Bets in Bio-based?” that venture capitalists have pumped in $5.8 billion into bio-based materials and chemicals startups since 2010, reflecting the drive for sustainability, performance, and alternatives to petroleum feedstocks. While from 2010 to 2015, the investment focus was on drop-in replacements for established chemicals, in 2016 VCs’ focus has shifted to disruptive synthetic biology (synbio) and conversion technologies.

Overall, synbio startups attracted over $300 million, accounting for 53% of all VC investment in 2016 (through October 11), and three of the top five deals. Fermentation and catalysis had funding shares of 20% and 16%, respectively.

“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,” said Victor Oh, Lux Research Analyst and lead author of the report. “Synbio companies are embracing information technology like BioCAD and BioLIMS to create disruption and to integrate new digital genetic tools like CRISPR gene editing,” he added.