The bottleneck of biomanufacturing

Synthetic biology (or “synbio”) is the design and engineering of biological systems to fabricate components that do not already exist in the natural world. New gene editing tools, such as CRISPR, have allowed us to read, write and edit genes with high precision and low cost, opening doors for new solutions for important challenges across climate, health and sustainability. 

While alternatives to meat or milk are the most widely discussed applications, synbio is also emerging as the frontrunner for a number of other use cases. Most notably, synbio could provide an entirely new approach to making things, replacing many of the petrochemical products we use in our everyday lives. These products include fuel, concrete, plastics, flavouring, skincare products and more. All the while using fewer resources, such as water and energy, in its production process.

We believe this is the decade of biology but challenges, particularly around the nascent infrastructure, need to be overcome for it to fulfil its promise.

The decade of the biomanufacturing revolution.

The pace of innovation is skyrocketing, the synbio market is expected to grow with a 25% CAGR over the next decade driven by the declining cost of DNA synthesis and sequencing. Until now synbio has been limited to high-cost, low-volume products such as pharma drugs where value is so high that you can afford to discard a couple of faulty batches. With the cost of production techniques declining rapidly, the door is opening for commodity products. McKinsey estimates  that the bio revolution could have a direct economic impact of $4tr with +50% of the impact happening outside of healthcare, in markets such as agriculture, food, materials and energy production. 

While this paints a rosy outlook, challenges remain in the value chain. To meet the projected demand for fermentation based alternative proteins alone, we need 10B litres of biomanufacturing capacity by 2030, 100x more than the world's existing capacity today (BCG).

The need for infrastructure to allow new technologies to scale is nothing new. The iOS and Android apps we know today were driven by innovation in the front-end. The revolution in the “infrastructure-as-a-service” such as cloud infrastructure, database and the creation of devops, came later and empowered applications to scale to user demand and drove the success of the sector. We expect to see a similar pattern in bio over the next few years. 

Lacking manufacturing infrastructure.

Compared to typical food processing, biomanufacturing is more complex. It’s heavily dependent on the size of the equipment. Even in a successfully scaled process, batch volatility remains high and yields low. Companies need a range of variously sized facilities to test out their technology before they can scale production. 

Today, due to a bottleneck in production infrastructure, companies are fighting for pilot manufacturing space. Many are using special relationships and inroads to be able to secure space while others are partnering with innovation labs or universities. For instance, Perfect Day teamed up with Archer Daniels Midland (ADM), to use their fermentation infrastructure at reduced cost. Others are repurposing ethanol plants, reducing the time to get the site up and running to 3-6 months from the 1-2 years it normally takes to build a facility from scratch. The status quo is a blocker to the industry scaling.

Traditional manufacturing plants are expensive and cannot be built quickly enough to meet demand. These plants are also often lacking in data management, automation and analytics. Most manufacturers have very little visibility in the process before they open the bioreactor. Plants are still run using pen and paper while those who capture data often store it in thousands of excel sheets, many times incomplete or with errors - or at best use legacy software. This limits the ability to improve efficiency and lower cost in the process, a requirement for bio-based products to be competitive. 

Over the past couple of years, most startups have had to raise large amounts of venture capital to build their own facilities. Equity is a blunt instrument and this is not necessarily the most efficient use of capital. It takes time to build a large capacity plant and also requires personnel to run it, adding to the cost structure. There are other players, outside of venture, who might be better suited to fund this infrastructure build out, such as infrastructure funds, but today the market is inefficient and disconnected. Indeed, as the era of cheap money comes to an end during the economic downturn, it will also become harder to attract venture capital to invest in large scale facilities. 

Together these challenges pose a threat to the success of the overall sector and the flourishing of the synbio industry. And of course, its anticipated positive impact on emissions. 

What are some areas of exciting innovations that are needed to make the biomanufacturing layer to make the biological future a reality? 

Below are a few areas with exciting developments that we’ve been exploring at Giant Ventures. 

Finding “the right” capital for large scale manufacturing space.

Synonym is building a financing and development platform for at scale biomanufacturing capacity to standardise the infrastructure buildout and get the right financing. They want to speed up go to market and reduce cost for synbio companies while offering green investment opportunities into infrastructure projects, a space currently attracting large pools of capital. Building out manufacturing capacity will take time. To solve some of the bottlenecks now Synonym is launching a free directory enabling companies to search for available fermentation space with their required specs globally. 

The challenge of scaling bio based processes.

Companies such as Culture Bioscience, offer bioreactor experiment capacity as a cloud based service. This is a timely and cost-effective solution to scaling from 250mL bioreactors all the way to 250L. Customers can develop, optimise and scale their bioprocesses, all from the comfort of their own home. 

Data management, analytics and automation.  

Invert is building best-in-class data management and data science tools to facilitate visibility, optimisation and automation of bioprocesses all the way from lab to large scale production. By gathering data, they create transparency in the process, allowing manufacturers to better optimise capacity by discarding faulty batches earlier or adjusting inputs in real time. In the future the goal is to enable in silico process design all the way from lab to large scale. Companies will be able to take their products to market faster, with improved yields and at cost parity with animal- or petroleum based products. 

Labour 

In addition to innovation in infrastructure, the booming sector will require a diverse workforce, from biological engineers to large scale manufacturing staff, data and software engineers and marketing. According to the World Economic Forum, a new segment of “cyan-collar” manufacturing jobs, the intersection between green technologies and traditional “blue-collar” workers, needs to be created, especially in rural areas where a lot of the manufacturing capacity is being built, to continue to support the sector's growth. 

President Biden agrees, in September he announced the National Biotech and biomanufacturing initiative to strengthen domestic manufacturing signalling that biomanufacturing is becoming an important element also in national biosecurity. The tailwinds are there. 

We believe that once the biomanufacturing infrastructure layer is built out, a range of applications will flourish, reinventing how we make things and contributing to the reversal of climate change in the process.

Are you a founder working in the space? Get in touch at madelene@giant.vc.

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