Bio-based materials and chemicals industry to attract $1b in 2014, says Lux Research

October 27, 2014 |

According to Lux Research, the bio-based materials and chemicals industry is poised to attract nearly $1 billion in investment this year, led notably by later-stage funding rounds.  The estimated $974 million investment represents a 28% increase from 2013, suggesting companies that endured the waves of economic disruption have gained maturity and regained investors’ confidence.

Lux Research analysts studied the investment landscape for BBMC, evaluating VC, corporate VC, IPOs, and M&A activity. Among their findings:

  • North American companies dominate. Driven by technology entrepreneurship and a favorable investment environment, North American companies cornered 87%, or $2.2 billion, of the total venture capital funding for the BBMC sector over the past three years.
  • Fermentation leads technologies. Among technologies, fermentation took home the largest share of investment, with companies in this space pulling in nearly $3 billion total since 2000, hitting a peak of $475.6 million in 2011.
  • M&A is on the rise. Subpar performances from companies such as Gevo and Amyris have dampened the public markets’ enthusiasm for the space.  As a result, many start-ups have scrapped IPO plans and sought other exits – witness Stora Enso’s acquisition of Virdia, Renewable Energy Group’s purchase of LS9 and Cereplast’s cheap acquisition of Trellis Earth.

 

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