Next Unicorn: Synthetic Biology Startup Ginkgo Bioworks?
The unicorn has been a creature of legend and myth since at least the time of the ancient Greeks. You know the sort: a rare and magnificent beast, a gleaming, spiral horn protruding from its head like a mighty if malformed phallus. A thing so pure that it practically ishts rainbows and butterflies. A unicorn. And then some venture capitalist back in 2013 decided to co-opt the term to refer to a startup valued at $1 billion or more. The term was a reference to the rarity of the achievement. Back then, there were fewer than 40 of these “rare” beasts roaming the virgin forests of capitalism. Fast forward four short years, and we’re now at 220 unicorns with a combined value of $765 billion, according to CB Insights. And there are whispers yet another company is poised to join the herd—the “organism company” known as Ginkgo Bioworks.
Pitchbook broke the news late last month that Ginkgo Bioworks is seeking to raise up to $265 million in Series D funding. However, we should stress nothing is official, and management at Ginkgo declined to comment to Pitchbook, which tracks the startup landscape using artificial intelligence. If true, that would bring total funding to about $419 million, with a valuation well north of $1 billion for the Boston-based startup, which was founded in 2008. That would also make Ginkgo a rarity in the unicorn herd, as one of the few billion-dollar biotech startups. But maybe that’s changing. Indigo Agriculture, also out of Boston, just closed the second half of a $203 million Series D this month to bring its war chest to $359 million and a $1.4 billion valuation, probably close to where Ginkgo would sit if the Series D financing comes through.
Designing Biological Factories
Indigo employs microbes to help improve crop yield and quality by finding the best “bugs” to help plants withstand drought, nutrient-poor soils or resist disease. Ginkgo Bioworks, on the other hand, is a biotech company that works in synthetic biology. While that might sound like the name of an ’80s synth pop band, synthetic biology refers to technology that approaches biology from an engineering perspective, often (but not always) involving genetic manipulation of some kind. The idea is that Mother Nature has produced some pretty good tools to get the job done. Companies like Ginkgo Bioworks take those basic building blocks and uses automation and other advanced tools to rapidly design, build and test organisms until they meet certain specifications. It’s a bit like the Model T assembly line of the 21st century but at the nanoscale, using artificial intelligence and robots.
Ginkgo’s first “foundry,” which opened in 2015, can now run 15,000 automated operations per month, testing thousands of new prototypes organisms for each project. A second foundry, Bioworks2, is twice as big and is expected to increase output sixfold. Yet a third facility, Bioworks3, is in the planning stages. Ginkgo’s custom-microbes are used in all sorts of applications, from developing organic pesticides to creating flavors and fragrances.
One area where these biological factories have been put to work is in fermentation technology for food, helping to recreate things like milk without the cow or cow pies. In an interview on the blog of PLOS ONE, a scientific journal nearly on par with Science and Nature, an official for Ginkgo explained that for one recent project the company needed to modulate and test three enzymes. Over six months, Ginkgo was able to improve the pathway, or efficiency, by 20-fold after thousands of iterations. As Christina Agapakis, creative director of Ginkgo, said, “This is the kind of scale where we are at now, and we are also trying to improve our throughput and capacity”.
Investment is Strong
Ginkgo is already moving and shaking like a unicorn. In September, the startup announced it would partner with Bayer and a hedge fund on a $100 million agtech startup that would be a direct competitor to Indigo. One possible microbial-based product could see crops capable of fertilizing themselves. Earlier this year, Ginkgo entered into a partnership with a global flavor and nutrition company called Kerry to produce specialty enzymes. Kerry already uses fermentation technology to produce enzymes but will turn to Ginkgo’s technology to improve their functionality for food.
Update 09/19/19: Ginkgo Bioworks has raised $290 million in Series E funding to further develop their cell programming platform. This brings the company’s total funding to $719.1 million to date.
It’s been a good year for biotech startups in general, according to PitchBook. Companies have raised about $10 billion across about 500 deals through the first 11 months of the year, compared to $7 billion in financing last year. Synthetic biology, specifically, surpassed $1 billion in financing last year for the first time, CB Insights reported. We don’t have near-year-end numbers yet, but a trade organization called SynBioBeta reported the industry was already well past a half-billion dollars in new investments as of early August.
Of course, Ginkgo Bioworks doesn’t compete in a vacuum. We’ve talked previously about one of their biggest competitors, Zymergen, which has raised about $174 million and has SoftBank in its corner. Another company in this arena and weight class has to include Synthetic Genomics. The California startup has only raised about $40 million, but its co-founder is scientist Craig Venter, probably the world leader in synthetic biology today. We’ve also looked at London-based Synthace, which provides a complete operating system for working with biology that integrates hardware with software for rapid experimentation. A recent Series A in September brought total funding to $16.2 million.
In the course of our research for this article, we picked up on a couple of other synthetic biology startups in the organism-engineering business:
Founded in 2011, yet another biotech company out of Boston called enEvolv has raised about $1.8 million for its micro-organism automation platform. If anyone was to challenge Craig Venter as master of synthetic biology it would be George Church, who just so happens to be the co-founder of enEvolv. Whereas companies like Ginkgo are screening thousands of strains per month, enEvolv builds and screens its genomic designs in massive parallel—directly in a single culture—which the company claims can allow it to work on the order of billions of strains per month. George may yet bring woolly mammoths back to life.
Founded in 2013, Vancouver-based MetaMixis has raised $100,000 in early-stage funding, including from public genetics company Illumina (NASDAQ:ILMN). At the core of its organism design business is the development of DNA-based biosensors that detect chemicals targeted for production. The biosensors then screen the company’s DNA library, looking for the most efficient pathways, narrowing down the time to search considerably:
SynBioBeta noted that MetaMixis is leveraging its technology, in particular, to develop a synthetic version of the flavoring vanillin, which today comes from petrochemicals and wood pulp. A Swiss company called Evolva, founded way back in 2004 before synthetic biology was mainstream, already brews vanillin using genetically modified yeast.
It should be pretty apparent to our readers that we’re very bullish on synthetic biology. It represents many of the emerging technologies that we write about today including artificial intelligence and robotics. We’ve argued vociferously in the past that synthetic biology is really nanotechnology—small machines or robots doing work on the nanoscale. These “robots” just happen to be biological. Of course, as we recently noted in our teardown on WTF Happened to Synthetic Biology Stocks, even the most exciting technologies must cope with the day-to-day market realities. Ginkgo Bioworks, as well as Zymergen and some of the others we’ve highlighted in this article, seem like solid businesses with good science. Let’s hope their rapid expansions into unicorns doesn’t turn out to be another once-upon-a-time fairytale with an unhappy ending.