In investment jargon, a “unicorn” has at least two meanings.
In investment jargon, a “unicorn” has at least two meanings. First, it refers to a relative rarity, a startup with a market cap of $1 billion or more. The second, which seems more isolated to biopharma, is a company with a single product in its pipeline.
The first meaning apparently appeared around 2013, and at that time, there were fewer than 40 “unicorns.” Now, according to CB Insights, there are 220 with a combined value of $765 billion. Nanalyze looks at what may be the next unicorn, Ginkgo Bioworks.
Headquartered in Boston, Ginkgo calls itself “The Organism Company,” and what it does is engineer bacteria and other microbes for commercial uses. The company has three areas: cultured ingredients, which are used in perfumes, foods and cosmetics; strain improvement, where fermentation is used in bioindustrial applications and the company engineers the strains to improve efficiency and yield; and enzymes, which are used in a number of applications that range from cheesemaking to pharmaceuticals to stonewashed jeans.
In September, Forbes listed Ginkgo as one of 25 U.S. companies likely to hit a valuation of $1 billion or more. At that time, the company had raised $154 million in equity investment and its estimated revenue for 2017 was $20 million. Its lead investors included Senator Investment Group, Viking Global Investors, and Y Combinator.
At that time, the company had 44 cells in the pipeline for 25 customers, and had 170 employees and 60 software-directed robots.
Nanalyze writes, “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 mark 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.”
Indigo is a similar business to Gingko, in that it uses engineered microbes for a variety of uses, primarily to improve crop yield. Both fall under the broader business of “synthetic biology.”
In September, Ginkgo announced a partnership with Bayer AG and Viking Global Investors to invest $100 million in an agricultural-focused microbe company that would be a direct competitor with Indigo Agriculture. Although unnamed, Gingko’s chief executive officer, Jason Kelly, told Reuters that the company would focus on plant-based microbes, especially developing ways that microbes help plants and soil assimilate nitrogen.
Also this year, Ginkgo partnered with Kerry, an international flavor and nutrition company, to manufacture specialty enzymes. Kerry currently utilizes fermentation process to create enzymes, but is asking Ginkgo to improve their functionality.
Nanalyze writes, “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.”
Overall, the success of Gingko Bioworks and these others, suggests that synthetic biology is one of the hot new areas of biopharma.
