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Gingko Bioworks, valued at $15B, begins trading today: Here’s how their business works
Gingko Bioworks, a synthetic biology company now valued at around $15 billion, begins trading on the New York Stock Exchange today.
Gingko’s market debut is one of the largest in biotech history. It’s expected to raise about $1.6 billion for the company. It’s also one of the biggest SPAC deals done to date — Gingko is going public through a merger with Soaring Eagle Acquisition Corp., which was announced in May.
Shares opened at $11.15 each this morning under the ticker DNA — biotech dieharders will recognize it as the former ticker used by Genentech.
The exterior of the NYSE is decked out in Gingko décor. The imagery is clearly sporting Jurassic Park themes, as MIT Tech Review’s Antonio Regalado pointed out. It’s probably intentional: Jason Kelly, the CEO of Ginkgo Bioworks, has been re-reading “Jurassic Park” this week, he tells TechCrunch.
The décor also sports a company motto: “Grow everything.”
Ginkgo was founded in 2009, and now bills itself as a synthetic biology platform. That’s essentially premised on the idea that one day, we’ll use cells to “grow everything,” and Gingko’s plan is to be that platform used to do that growing.
Kelly, who often uses language borrowed from computing to describe his company, likens DNA to code. Gingko, he says, aims to “program cells like you can program computers.” Ultimately, those cells can be used to make stuff: like fragrances, flavors, materials, drugs or food products.
The biggest lingering question over Gingko, ever since the SPAC deal was announced, has centered on its massively high valuation. When Moderna, now a household name thanks to its COVID-19 vaccines, went public in 2018, the company was valued at $7.5 billion. Gingko’s valuation is double that number.
“I think that surprises people to be honest,” Kelly says.
How is Gingko going to make money?
Ginkgo’s massive valuation seems even starker when you look at its existing revenues. SEC documents show that the company pulled in $77 million in revenue in 2020, which increased to about $88 million in the first six months of 2021 (per an August investor call). The company has also reported losses: including $126.6 million in December 2020 and $119.3 million in 2019.
Gingko is aiming to increase revenue a significant amount in 2021. SEC documents initially noted that the company aimed to draw about $150 million in revenue in 2021, but the August earning call updated that total for the year to over $175 million.
Gingko aims to make money in two ways: first it contracts with manufacturers during the research and development phase (i.e. while the company works out how to manufacture a cell that spits out a certain fragrance, bio-based nylon or meatless burger). That process happens in Gingko’s “foundry,” a massive factory for bioengineering projects.
This source of money is already starting to flow. Gingko reported $59 million in foundry revenue for 2020, and anticipates $100 million in 2021, per the August investor call.
This revenue, though, isn’t covering the full costs of Gingko’s operations, according to the information shared by the company in SEC documents. It is covering an increasing share, though, and as Gingko scales up its platform, costs will come down. Based on fees alone, Kelly projects Gingko will break even by 2024 or 2025.
The second type of revenue comes from royalties, milestone payments or, in some cases, equity stakes in the companies that go on to sell products, like fragrances or meatless burgers, made using Gingko’s facilities or know-how. It’s this source of income that will make up the vast majority of the company’s future worth, according to its expectations.
Once the product is made and marketed by another company, it requires little to no more work on Gingko’s part — all the company does is collect cash.
The company is often hesitant to incorporate these earnings into projections, because they rely on other companies bringing products to market. That means it’s hard to know for sure when these downstream payments will emerge. “In our models, we are very sensitive that, at the end of the day, they’re not our products. I cannot predict when Roche might bring a drug to market and give me my milestones,” says Kelly.
Kelly says there’s evidence this model will start to work in the near-term.
Gingko earned a “bolus” milestone payment of 1.5 million shares of The Cronos Group, a cannabis company, for developing a commercially viable, lab-grown rare cannabinoid called CBG for commercial use (there are seven more in strains development, says Kelly). These milestone payments (in cash or shares) are earned when a company achieves some predetermined goal using Gingko’s platform.
Gingko has also worked with Aldevron to manufacture an enzyme critical to the production of mRNA vaccines, and plans to collect royalty payments from that relationship — though no foundry fees were collected from this project.
Finally, Gingko has negotiated an equity stake in Motif Foodworks, a spinout company based on its technology. That company has so far raised about $226 million, and will aim to launch a lab-grown beef product developed at Gingko’s foundry, paying Gingko the aforementioned foundry fees already for this contribution.
“The biggest value driver” of Gingko, according to Kelly
This rich source of cash will depend a lot on the outside contractor’s ability to manufacture and sell products made using Gingko’s platform. This opens the company up to some risk that’s beyond its control. Maybe, for instance, it turns people don’t want bio-manufactured meat as much as many anticipated — that means some types of downstream payments may not materialize.
Kelly says he’s not particularly worried about this. Even if one particular program fails, he’s planning on having so many programs running that one or two are bound to succeed.
“I’m just sorta like: some will work, some won’t work. Some will take a year, some will take three years. It doesn’t really matter, as long as everybody is working with us,” he says. “Apple doesn’t stress about what apps are going to be the next big app in the app store,” he continues.
One key metric to watch for Gingko going forward will be how many new cell programs they’re managing to close. So far, Gingko has added 30 programs this year, says Kelly. Last year, there were 50 programs.
Remember: Some of the projects are Gingko spinouts, like Motif Foodworks, not customers that come to the platform on their own. And historically, the number of companies Gingko has partnered with has been a point of criticism. Per SEC documents, the majority of revenue came from two large partners in 2020 — though Kelly told Business Insider that this was a pandemic-related downturn.
The more programs Gingko has, the more it becomes insulated from the success or failure of any one product. Plus it’s a sign that people are at least using the “app store” for biology.
“The biggest value driver of Gingko is how quickly we add programs,” Kelly says.
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AI startup Sorcero secures $10M for language intelligence platform
Sorcero announced Thursday a $10 million Series A round of funding to continue scaling its medical and technical language intelligence platform.
The latest funding round comes as the company, headquartered in Washington, D.C. and Cambridge, Massachusetts, sees increased demand for its advanced analytics from life sciences and technical companies. Sorcero’s natural language processing platform makes it easier for subject-matter experts to find answers to their questions to aid in better decision making.
CityRock Venture Partners, the growth fund of H/L Ventures, and Harmonix Fund co-led the round and were joined by new investors Rackhouse, Mighty Capital and Leawood VC, as well as existing investors, Castor Ventures and WorldQuant Ventures. The new investment gives Sorcero a total of $15.7 million in funding since it was founded in 2018.
Prior to starting Sorcero, Dipanwita Das, co-founder and CEO, told TechCrunch she was working in public policy, a place where scientific content is useful, but often a source of confusion and burden. She thought there had to be a more effective way to make better decisions across the healthcare value chain. That’s when she met co-founders Walter Bender and Richard Graves and started the company.
“Everything is in service of subject-matter experts being faster, better and less prone to errors,” Das said. “Advances of deep learning with accuracy add a lot of transparency. We are used by science affairs and regulatory teams whose jobs it is to collect scientific data and effectively communicate it to a variety of stakeholders.”
The total addressable market for language intelligence is big — Das estimated it to be $42 billion just for the life sciences sector. Due to the demand, the co-founders have seen the company grow at 324% year over year since 2020, she added.
Raising a Series A enables the company to serve more customers across the life sciences sector. The company will invest in talent in both engineering and on the commercial side. It will also put some funds into Sorcero’s go-to-market strategy to go after other use cases.
In the next 12 to 18 months, a big focus for the company will be scaling into product market fit in the medical affairs and regulatory space and closing new partnerships.
Oliver Libby, partner at CityRock Venture Partners, said Sorcero’s platform “provides the rails for AI solutions for companies” that have traditionally found issues with AI technologies as they try to integrate data sets that are already in existence in order to run analysis effectively on top of that.
Rather than have to build custom technology and connectors, Sorcero is “revolutionizing it, reducing time and increasing accuracy,” and if AI is to have a future, it needs a universal translator that plugs into everything, he said.
“One of the hallmarks in the response to COVID was how quickly the scientific community had to do revolutionary things,” Libby added. “The time to vaccine was almost a miracle of modern science. One of the first things they did was track medical resources and turn them into a hook for pharmaceutical companies. There couldn’t have been a better use case for Sorcero than COVID.”
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AgBiome lands $116M for safer crop protection technology
AgBiome, developing products from microbial communities, brought in a $116 million Series D round as the company prepares to pad its pipeline with new products.
The company, based in Research Triangle Park, N.C., was co-founded in 2012 by a group including co-CEOs Scott Uknes and Eric Ward, who have known each other for over 30 years. They created the Genesis discovery platform to capture diverse microbes for agricultural applications, like crop protection, and screen the strains for the best assays that would work for insect, disease and nematode control.
“The microbial world is immense,” said Uknes, who explained that there is estimated to be a trillion microbes, but only 1% have been discovered. The microbes already discovered are used by humans for things like pharmaceuticals, food and agriculture. AgBiome built its database in Genesis to house over 100,000 microbes and every genome in every microbe was sequenced into hundreds of strains.
The company randomly selects strains and looks for the best family of strains with a certain activity, like preventing fungus on strawberries, and creates the product.
AgBiome co-CEOs Scott Uknes and Eric Ward. Image Credits: AgBiome
Its first fungicide product, Howler, was launched last year and works on more than 300 crop-disease combinations. The company saw 10x sales growth in 2020, Uknes told TechCrunch. As part of farmers’ integrated pest program, they often spray fungicide applications 12 times per year in order to yield fruits and vegetables.
Due to its safer formula, Howler can be used as the last spray in the program, and its differentiator is a shorter re-entry period — farmers can spray in the morning and be able to go back out in the field in the afternoon. It also has a shorter pre-harvest time of four hours after application. Other fungicides on the market today require seven days before re-entry and pre-harvest, Uknes explained.
AgBiome aims to add a second fungicide product, Theia, in early 2022, while a third, Esendo was submitted for Environmental Protection Agency registration. Uknes expects to have 11 products, also expanding into insecticides and herbicides, by 2025.
The oversubscribed Series D round was co-led by Blue Horizon and Novalis LifeSciences and included multiple new and existing investors. The latest investment gives AgBiome over $200 million in total funding to date. The company’s last funding round was a $65 million Series C raised in 2018.
While competitors in synthetic biology often sell their companies to someone who can manufacture their products, Uknes said AgBiome decided to manufacture and commercialize the products itself, something he is proud of his team for being able to do.
“We want to feed the world responsibly, and these products have the ability to substitute for synthetic chemicals and provide growers a way to protect their crops, especially as consumers want natural, sustainable tools,” he added.
The company has grown to over 100 employees and will use the new funding to accelerate production of its two new products, building out its manufacturing capacity in North America and expanding its footprint internationally. Uknes anticipates growing its employee headcount to 300 in the next five years.
AgBiome anticipates rolling up some smaller companies that have a product in production to expand its pipeline in addition to its organic growth. As a result, Uknes said he was particular about the kind of investment partners that would work best toward that goal.
Przemek Obloj, managing partner at Blue Horizon, was introduced to the company by existing investors. His firm has an impact fund focused on the future of food and began investing in alternative proteins in 2016 before expanding that to delivery systems in agriculture technology, he said.
Obloj said AgBiome is operating in a $60 billion market where the problems include products that put toxic chemicals into the ground that end up in water systems. While the solution would be to not do that, not doing that would mean produce doesn’t grow as well, he added.
The change in technology in agriculture is enabling Uknes and Ward to do something that wasn’t possible 10 years ago because there was not enough compute or storage power to discover and sequence microbes.
“We don’t want to pollute the Earth, but we have to find a way to feed 9 billion people by 2050,” Obloj said. “With AgBiome, there is an alternative way to protect crops than by polluting the Earth or having health risks.”
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Rani Therapeutics’ $73M IPO will fund upcoming clinical trials
Rani Therapeutics, a San Jose-based company developing a pill to replace medical injections, went public on Friday.
According to S-1 filings, shares were estimated to price between $14 and $16 last week. On Friday, shares debuted slightly lower, around $11. Rani raised about $73 million in its debut.
Rani’s debut comes amidst a flurry of IPO activity in therapeutics. In 2020, 71 biotech companies went public. Already in 2021, 59 companies have IPO’ed, and even more are on the way. On July 30 alone, eight biotech companies were expected to begin trading, including Rani Therapeutics.
Rani Therapeutics, is, as founder Mir Imran puts it, “laser focused” on itself, rather than the IPO activity around it. The decision to go public was partially bolstered by the results of a phase I study — early evidence that the RaniPill, the company’s flagship product, could be brought into the clinic.
“We are already in humans, and clearly on a strong path to make oral biologics [a] reality. This is a hot and unique market for life science direction and we’re excited to be driving innovation in this area,” Imran tells TechCrunch.
Rani Therapeutics’ flagship product is RaniPill, essentially, a capsule designed to deliver medicines that would usually be delivered via injections. TechCrunch covered the pill in more detail here, but it works according to a few basic steps.
The pill is covered by a coating resistant to stomach acid. Once the pill enters the small intestine, the coating dissolves, allowing for a small balloon to inflate. Once that small balloon inflates, medication is delivered by a microneedle (which dissolves after the drug is administered). Then, the rest of the balloon is “excreted through normal digestive processes,” per the company’s S-1 filing.
This whole process occurs in a pill that, on the outside, looks like a gel capsule.
There is evidence for some conditions suggesting patients prefer oral drugs to injections: for example, studies on cancer patients have illuminated patient preference for oral therapies rather than regular injections. That’s not the case for every condition. Some patients show preference to long-acting medicines delivered via injection rather than having to take lots of pills (this is the case for some HIV patients).
However, it’s fair to say that needles aren’t exactly pleasant. A 2019 review and meta analysis of 35 studies found that between 20% and 30% of young adults are afraid of needles, a fear that can lead some people to avoid medical treatments or vaccines.
Rani Therapeutics has been developing capsules for drugs that have already been approved by the FDA, but are often administered via regular injections. They include:
- Octreotide for acromegaly or neuroendocrine tumors in the GI tract (NETs)
- TNF-alpha inhibitors for psoriatic arthritis
- Parathyroid hormone (PTH) for osteoporosis
- Human growth hormone (HGH) for HGH deficiency
- Parathyroid hormone for hypothyroidism
The product furthest along in the research cycle is the pill developed to administer octreotide (called RT-101), which was tested in a phase I clinical trial on 62 participants. The trial results, partially reported in the S-1 filing, showed 65% bioavailability of the octreotide drug, compared to an injection. That suggests that the pills can get the drugs into the body efficiently, though these results are early.
Next year, the company plans to initiate two additional Phase I studies on PTH for osteoporosis, and human growth hormone. Studies on the rest of the drugs in the pipeline are scheduled for 2023.
Ultimately, the company’s goal is to validate the RaniPill independently of specific drugs. The company is pursuing an Investigational Device Exemption (IDE), which would allow the company to test RaniPill in a clinical study without a drug involved. This study aims to establish how safe the product is for repeated dosing, and is slated to begin next year.
“I think we want to continue to generate data with drugs, because we will be making drugs. But nonetheless, it’s important to establish what the platform’s safety and tolerability is,” said Imran. So that’s quite important as well.”
The company’s leadership does have a track record of successful exits in the biotech space.
Rani Therapeutics was founded in 2012 by Mir Imran, who has already overseen several exits and acquisitions of medical device companies. In 1985, Imran developed an implantable cardiac defibrillator as part of his first company, Intec Systems, which was later acquired by Eli Lilly. Since, he has started 20 medical device companies, of which 15 have either IPOed or been acquired.
However, for now, Rani Therapeutics financials report significant losses. Net losses for 2019 and 2020 totaled $26.6 million and $16.7 million, respectively. As of March 2021, the company was running a deficit of $119.6 million.
In total, the company has raised about $211.5 million in funding since inception, without counting cash generated from today’s IPO. Rani Therapeutics has plans to use the $73 million raised during the IPO to fund the IDE study and pursue additional clinical trials.
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Planted raises another $21M to expand its growing plant-based meat empire (and add schnitzel)
Swiss alternative protein company Planted has raised its second round of the year, a CHF 19 million (about $21 million at present) “pre-B” fundraise that will help it continue its growth and debut new products. A U.S. launch is in the cards eventually, but for now Planted’s exclusively European customers will be able to give its new veggie schnitzel a shot.
Planted appeared in 2019 as a spinoff from Swiss research university ETH Zurich, where the founders developed the original technique of extruding plant proteins and water into fibrous structures similar to real meat’s. Since then the company has diversified its protein sources, adding oat and sunflower to the mix, and developed pulled pork and kebab alternative products as well.
Over time the process has improved as well. “We added fermentation/biotech technologies to enhance taste and texture,” wrote CEO and co-founder Christoph Jenny in an email to TechCrunch. “Meaning 1) we can create structures without form limitation and 2) can add a broader taste profile.”
The latest advance is schnitzel, which is of course a breaded and fried piece of pounded-thin meat style popular around the world, but especially in the company’s core markets of Germany, Austria and Switzerland. Jenny noted that Planted’s schnitzel is produced as one piece, not pressed together from smaller bits. “The taste and texture benefit from fermentation approach, that makes the flavor profile mouth watering and the texture super juicy,” he said, though of course we will have to test it to be sure. Expect schnitzel to debut in Q3.
It’s the first of several planned “whole” or “prime” cuts, larger pieces that can be prepared like any other piece of meat — the team says their products require no special preparation or additives and can be dropped in as 1:1 replacements in most recipes. Right now the big cuts are leaving the lab and entering consumer testing for taste tuning and eventually scaling.
The funding round came from “Vorwerk Ventures, Gullspång Re:food, Movendo Capital, Good Seed Ventures, Joyance, ACE & Company (SFG strategy) and Be8 Ventures,” and was described as a follow-on to March’s CHF 17M series A. No doubt the exploding demand for alternative proteins and growing competition in the space has spurred Planted’s investors to opt for more aggressive growth and development strategies.
The company plans to enter several new markets over Q3 and Q4, but the U.S. is still a question mark due to COVID-19 restrictions on travel. Jenny said they are preparing so that they can make that move whenever it becomes possible, but for now Planted is focused on the European market.
(Update: This article originally misstated the new round as also being CHF 17M — entirely my mistake. This has been corrected.)
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Mixlab raises $20M to provide purrfect pharmacy experience for pet parents
Pet pharmacy Mixlab has developed a digital platform enabling veterinarians to prescribe medications and have them delivered — sometimes on the same day — to pet parents.
The New York-based company raised a $20 million Series A in a round of funding led by Sonoma Brands and including Global Founders Capital, Monogram Capital, Lakehouse Ventures and Brand Foundry. The new investment gives Mixlab total funding of $30 million, said Fred Dijols, co-founder and CEO of Mixlab.
Dijols and Stella Kim, chief experience officer, co-founded Mixlab in 2017 to provide a better pharmacy experience, with the veterinarian at the center.
Dijols’ background is in medical devices as well as healthcare investment banking, where he became interested in the pharmacy industry, following TruePill and PillPack, which he told TechCrunch were “creating a modern pharmacy model.”
As more pharmacy experiences revolved around at-home delivery, he found the veterinary side of pharmacy was not keeping up. He met Kim, a user experience expert, whose family owns a pharmacy, and wanted to bring technology into the industry.
“The pharmacy industry is changing a lot, and technology allows us to personalize the care and experience for the veterinarian, pet parent and the pet,” Kim said. “Customer service is important in healthcare as is dignity and empathy. We kept that in mind when starting Mixlab. Many companies use technology to remove the human element, but we use it to elevate it.”
Mixlab’s technology includes a digital service for veterinarians to streamline their daily medication workflow and gives them back time to spend with patient care. The platform manages the home delivery of medications across branded, generic and over-the-counter medications, as well as reduces a clinic’s on-site pharmacy inventories. Veterinarians can write prescriptions in seconds and track medication progress and therapy compliance.
The company also operates its own compound pharmacy where it specializes in making medications on-demand that are flavored and dosed.
On the pet parent side, they no longer have to wait up to a week for medications nor have to drive over to the clinic to pick them up. Medications come in a personalized care package that includes a note from the pharmacist, clear and easy-to-read instructions and a new toy.
Over the past year, adoptions of pets spiked as more people were at home, also leading to an increase in vet visits. This also caused the global pet care industry to boom, and it is now projected to reach $343 billion by 2030, when it had been valued at $208 billion in 2020.
Pet parents are also spending more on their pets, and a Morgan Stanley report showed that they see pets as part of their family, and as a result, 37% of people said they would take on debt to pay for a pet’s medical expenses, while 29% would put a pet’s needs before their own.
To meet the increased demand in veterinary care, the company will use the new funding to improve its technology and expand into more locations where it can provide same-day delivery. Currently it is shipping to 47 states and Dijols expects to be completely national by the end of the year. He also expects to hire more people on both the sales team and in executive leadership positions.
The company is already operating in New York and Los Angeles and growing 3x year over year, though Dijols admits operating during the pandemic was a bit challenging due to “a massive surge of orders” that came in as veterinarians had to shut down their offices.
As part of the investment, Keith Levy, operating partner at Sonoma Brands and former president of pet food manufacturer Royal Canin USA, will join Mixlab’s board of directors. Sonoma Brands is focused on growth sectors of the consumer economy, and pets was one of the areas that investors were interested in.
Over time, Sonoma found that within the veterinary community, there was space for a lot of players. However, veterinarians want to home in on one company they trust, and Mixlab fit that description for many because they were getting medication out faster, Levy said.
“What Mixlab is doing isn’t completely unique, but they are doing it better,” he added. “When we looked at their customer service metrics, we saw they had a good reputation and were relentlessly focused on providing a better experience.”
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Glyphic Biotechnologies raises $6M to accelerate protein sequencing by orders of magnitude
The whole human proteome may be free to browse thanks to DeepMind, but at the bleeding edge of biotech new proteins are made and tested every day, a complex and time-consuming process. Glyphic Biotechnologies accelerates the critical but slow sequencing step, potentially cutting drug development times down by a huge amount, and the startup just raised a $6 million seed to bring its clever solution to market.
Proteins are at the heart of many new treatments and products; the ubiquitous and infinitely varied chains of amino acids twist into shapes that interact with cells, substances in the body, and other proteins, doing everything from interpreting DNA to controlling access to secure areas (“sorry, no potassium allowed”).
In the drug discovery and biotech world, proteins represent unlimited possibility — the right one could clamp onto cancer cells, facilitate natural healing processes, or prompt the creation of helpful substances. But finding and testing novel molecules is not easy — and a big part of that is sequencing, which confirms the exact makeup of the protein you’re trying to test.
Right now there are several large companies doing good business in the protein discovery world, and generally the process involves identifying the amino acid at the end of the protein chain, then snipping it off, identifying the next one, and so on until you’ve done the whole thing.
The trouble with this approach is that the protein’s shape or the molecular properties of the next amino acid in line can interfere with the process of binding to and identifying the one on the very end. As a result there’s a certain amount of uncertainty and a lack of unreliability inherent to the process.
Glyphic Biotechnologies changes that by adding a step where the target amino acid is detached first and then tethered nearby using a novel molecule called ClickP developed by one of the co-founders. A single stationary amino acid attached to a known molecule is much, much easier to identify, and when it’s done, the process repeats as before.
It’s briefly stated but the advance is significant. Current techniques in the antibody discovery space produce and inspect on the order of tens of thousands of proteins per week per (very expensive) machine. It sounds like a lot but with proteins essentially innumerable, it’s just a drop in the bucket. Even running 24/7 this rate doesn’t come close to satisfying demand.
Glyphic’s approach, utilizing ClickP and single-molecule microscopy (like that used by DNA sequencing giant Illumina), should be capable of millions to tens of millions per week, possibly climbing to billions in time. Even at the most conservative estimate you’re talking about orders of magnitude in improvement — those tens of thousands in the other techniques include lots of (perhaps mostly) repeat or junk information due to their use of B cell cultivation to produce the antibodies in question.
Image Credits: Glyphic Biotechnologies
Not only that, but because the ClickP process avoids the problem of interference from the next amino acid in the chain, it has way, way higher specificity and confidence. So you wouldn’t just be sequencing a hundred or a thousand times as many proteins, you’d be far more sure about the results.
At first Glyphic would be processing samples sent to them, but ultimately their tech could live in other labs as their competitors do now. Going from service to hardware sales and support is the current roadmap.
If everything works as advertised, Glyphic could be the new standard in protein sequencing just as demand skyrockets in the biotech world. To do so, though, it needs just a bit more time in the incubator.
The process they pioneered was the result of work done by co-founders Joshua Yang (CEO) and Daniel Estandian (CTO) at the lab of MIT’s Ed Boyden (on the team as “scientific founder”).
CTO Daniel Estandian, left, and CEO Josh Yang. Image Credits: Glyphic Biotechnologies
Yang explained that what stands between them and potential industry dominance is a mere matter of chemical engineering.
“My co-founder [Estandian] developed ClickP himself. The chemistry works,” he told me. “But as a spinout of an academic lab, we didn’t develop all 20 binders, because it would have bankrupted the lab. This isn’t an ‘off-the-shelf’ molecule.”
These binders are a bit like adapters that make the process work for each of the 20 amino acids. It takes time and money to engineer them, so they decided to show the system off with a handful first in order to get the cash to make the rest. “It’s really just about putting the time into getting them out there,” said Yang.
The $6.025 million seed round should finance the company through this early stage as it builds its platform. It was led by OMX ventures (which previously invested in 10X Genomics and Twist Bioscience), with participation from Osage University Partners, Wing VC, Artis Ventures, Cantos Ventures, Civilization Ventures, and Axial VC, and has an angel investor in Mammoth Biosciences CEO Trevor Martin.
Glyphic will be making its first home at Bakar Labs, the freshly inaugurated new Berkeley biotech incubator. There it will stay until it’s ready to take the next big step, likely hardware manufacturing next year on the back of an A round to be raised then. 2022 should then also see the company’s first paid services. And the antibody market, as large as it is, is only the beginning.
“Antibodies are just a starting point, as numerous applications can benefit from protein sequencing,” Josh explained in an email after we spoke. “Another high value area is in industrial biotechnology, where protein-sequencing-based screening of evolved enzymes can help identify enhanced or novel functions (e.g., better laundry detergents, waste-water treatment). Development of diagnostic tests would also benefit because, the more proteins you can sequence and identify in a sample set, the increased likelihood you can identify rare yet important biomarkers and/or develop a robust panel of biomarkers that together can detect or predict disease.”
A company like Glyphic may seem like a perfect target to get snapped up by one of the more deep-pocketed competitors out there, but Yang said they’re confident enough to ride it out.
“The activity in this space is insane. My co-founder and I really want to be the next Illumina or 10X Genomics — we really want to be that leader in proteomics.” And unless the competition has a few cards hidden up their sleeves, Yang’s ambition seems like a distinct possibility.
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SoftBank-backed Embark Veterinary valued at $700M after $75M Series B
Now that you have that COVID dog, Embark Veterinary wants to help him or her be in your life for a long time by offering DNA testing with the goal of curbing preventable diseases and increasing the lifespan of dogs by three years within the next decade.
The Boston-based dog genetics company raised $75 million in Series B funding in what the company is calling “the biggest Series B for a pet startup to date.” SoftBank Vision Fund 2 was the lead investor and was joined by existing investors F-Prime Capital, SV Angel, Slow Ventures, Freestyle Capital and Third Kind Venture Capital.
The new round boosts Embark’s total funding to $94.3 million since the company was founded in 2015, according to Crunchbase data. It also gives it a post-money valuation of $700 million, Embark founder and CEO Ryan Boyko told TechCrunch.
Boyko has been a dog lover all his life, and also interested in biology and evolution. Dogs, in particular, are fascinating to him because of their variety: they can be bred to be two pounds or 200 pounds, and come in all shapes and sizes. His interest led him to study dogs in order to understand their evolution.
“I began to think about health problems, and honestly, dogs are a better system for using genetics to better their health than humans,” Boyko said. “You can breed them, so genetics has as much power to cause health problems as it can improve quality and life.”
Embark’s dog DNA test retails for $199 and enables dog owners, breeders and veterinarians to personalize care plans based on a dog’s unique genetic profile. It can test for over 350 breeds and 200 genetic health risks, as well as physical traits. Similar to a 23andMe test, test users can learn characteristics about breed, health and ancestry.
For example, the test could show that a healthy dog may have a gene that predisposes them to slipped discs. If the dog has that, then weight management would be an important factor in their care regime, as would not allowing them to jump off the couch. Another common genetic risk is HUU, or Hyperuricosuria, which is elevated levels of uric acid in urine that could lead to bladder stones due to the way dogs process minerals. By changing the dog’s diet, it could reduce the risk for developing the stones, which are painful and expensive to treat, Boyko said.
The test’s technology revolves around proprietary genotyping technology that analyzes more than 200,000 genetic markers, currently two times more information than any other dog DNA test on the market, Boyko said. This gives Embark the world’s largest database of canine health and biological information, enabling the company to provide insights into certain conditions and make new discoveries about health risks, traits and breeds.
Embark aims to become the standard of care for dog owners and vets. It grew 235% between 2019 and 2020 and saw five times the sales over the past two years. To support that growth, the company intends to use the new funding to bring on key hires and expand its database. Boyko anticipates adding more than 100 employees between 2021 and 2022.
Boyko said the opportunity in the pet startup space is huge. Indeed, U.S. spending on pets reached nearly $100 billion in 2020, up from $95.7 billion in 2019, according to the American Pet Products Association.
At the same time, venture capital interest in U.S. pet-focused companies, from nutrition to travel to healthcare, grew 29.5% from 2019 and 2020, according to Crunchbase data. In addition to Embark’s funding, 2021 was good to other pet startups as well, including pet insurance company Wagmo, raising $12.5 million, connected pet collar company Fi received $30 million and Rover, which announced plans to go public via SPAC.
Lydia Jett, partner at SoftBank Investment Advisers, told TechCrunch that this was her first pet-based investment, and what Embark is doing brings advances to a category right now where people care about their pets enough that they want to do something that will expand their value of life.
Jett said the management team being dedicated to DNA-based analytics is the future, and Embark is starting this big curve when it comes to pets and the convergence of real emotional ties to pets and the ability to improve their lives.
“This company is a driver of change to happen,” she added. “We are the largest consumer investor in the world, and Embark is very much aligned with what we are seeing across our portfolio that consumers are revisiting priorities and choices. That is a major trend, but still early in the cycle of personalization for their pets.”
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Pivot Bio rakes in $430M round D as modified microbes prove their worth in agriculture
Pivot Bio makes fertilizer — but not directly. Its modified microorganisms are added to soil and they produce nitrogen that would otherwise have to be trucked in and dumped there. This biotech-powered approach can save farmers money and time and ultimately may be easier on the environment — a huge opportunity that investors have plowed $430 million into in the company’s latest funding round.
Nitrogen is among the nutrients crops need to survive and thrive, and it’s only by dumping fertilizer on the soil and mixing it in that farmers can keep growing at today’s rates. But in some ways we’re still doing what our forebears did generations ago.
“Fertilizer changed agriculture — it’s what made so much of the last century possible. But it’s not a perfect way to get nutrients to crops,” said Karsten Temme, CEO and co-founder of Pivot Bio. He pointed out the simple fact that distributing fertilizer over a thousand — let alone ten thousand or more — acres of farmland is an immense mechanical and logistical challenge, involving many people, heavy machinery and valuable time.
Not to mention the risk that a heavy rain might carry off a lot of the fertilizer before it’s absorbed and used, and the huge contributions of greenhouse gases the fertilizing process produces. (The microbe approach seems to be considerably better for the environment.)
Yet the reason we do this in the first place is essentially to imitate the work of microbes that live in the soil and produce nitrogen naturally. Plants and these microbes have a relationship going back millions of years, but the tiny organisms simply don’t produce enough. Pivot Bio’s insight when it started more than a decade ago was that a few tweaks could supercharge this natural nitrogen cycle.
“We’ve all known microbes were the way to go,” he said. “They’re naturally part of the root system — they were already there. They have this feedback loop, where if they detect fertilizer they don’t make nitrogen, to save energy. The only thing that we’ve done is, the portion of their genome responsible for producing nitrogen is offline, and we’re waking it up.”
Other agriculture-focused biotech companies like Indigo and AgBiome are also looking at modifying and managing the plant’s “microbiome,” which is to say the life that lives in the immediate vicinity of a given plant. A modified microbiome may be resistant to pests, reduce disease or offer other benefits.
Image Credits: Pivot Bio
It’s not so different from yeast, which as many know from experience works as a living rising agent. That microbe has been cultivated to consume sugar and produce a gas, which leads to the air pockets in baked goods. This microbe has been modified a bit more directly to continually consume the sugars put out by plants and put out nitrogen. And they can do it at rates that massively reduce the need for adding solid fertilizer to the soil.
“We’ve taken what is traditionally tons and tons of physical materials, and shrunk that into a powder, like baker’s yeast, that you can fit in your hand,” Temme said (though, to be precise, the product is applied as a liquid). “All of a sudden managing that farm gets a little easier. You free up the time you would have spent sitting in the tractor applying fertilizer to the field; you’ll add our product at the same time you’d be planting your seeds. And you have the confidence that if a rainstorm comes through in the spring, it’s not washing it all away. Globally about half of all fertilizer is washed away… but microbes don’t mind.”
Instead, the microbes just quietly sit in the soil pumping out nitrogen at a rate of up to 40 pounds per acre — a remarkably old-fashioned way to measure it (why not grams per square centimeter?), but perhaps in keeping with agriculture’s occasional anachronistic tendencies. Depending on the crop and environment, that may be enough to do without added fertilizers at all, or it might be about half or less.
Whatever the proportion provided by the microbes, it must be tempting to employ them, because Pivot Bio tripled its revenue in 2021. You might wonder why they can be so sure only halfway through the year, but as they are currently only selling to farmers in the northern hemisphere and the product is applied at planting time early in the year, they’re done with sales for the year and can be sure it’s three times what they sold in 2020.
The microbes die off once the crop is harvested, so it’s not a permanent change to the ecosystem. And next year, when farmers come back for more, the organisms may well have been modified further. It’s not quite as simple as turning the nitrogen production on or off in the genome; the enzymatic pathway from sugar to nitrogen can be improved, and the threshold for when the microbes decide to undertake the process rather than rest can be changed as well. The latest iteration, Proven 40, has the yield mentioned above, but further improvements are planned, attracting potential customers on the fence about whether it’s worth the trouble to change tactics.
The potential for recurring revenue and growth (by their current estimate they are currently able to address about a quarter of a $200 billion total market) led to the current monster D round, which was led by DCVC and Temasek. There are about a dozen other investors, for which I refer readers to the press release, which lists them in no doubt a very carefully negotiated order.
Temme says the money will go toward deepening and broadening the platform and growing the relationship with farmers, who seem to be hooked after giving it a shot. Right now the microbes are specific to corn, wheat and rice, which of course covers a great deal of agriculture, but there are many other corners of the industry that would benefit from a streamlined, enhanced nitrogen cycle. And it’s certainly a powerful validation of the vision Temme and his co-founder Alvin Tamsir had 15 years ago in grad school, he said. Here’s hoping that’s food for thought for those in that position now, wondering if it’s all worth it.
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In an increasingly hot biotech market, protecting IP is key
After a record year for biotech investment in 2020 — during which the industry saw $28.5 billion invested across 1,073 deals — the market for new innovations remains strong. What’s more, these innovations are increasingly coming to market by way of early-stage startups and/or their scientific founders from academia.
In 2018, for instance, U.S. campuses conducted $79 billion worth of sponsored research, much of it thanks to the federal government. That number spiked amid the pandemic and could increase even more if President Biden’s infrastructure plan, which includes $180 billion to enhance R&D efforts, passes.
Since 1996, 14,000 startups have licensed technology out of those universities, and 67% of licenses were taken by startups or small companies. Meanwhile, the median step-up from seed to Series A is now 2x — higher than all other stages, suggesting that biotech startups are continuing to attract investment at earlier stages.
When it comes to protecting IP, early and consistent communication with investors, tech transfer offices and advisers can make all the difference.
For biotech startups and their founders, these headwinds signal immense promise. But initial funding is only one part of a long journey that (ideally) ends with bringing a product to market. Along the way, founders will need to procure additional investments, develop strategic partnerships and stave off competition. All of which starts by protecting the fundamental asset of any biotech company: its intellectual property.
Here are three key considerations for startups and founders as they get started.
Start with an option agreement
Most early-stage biotechnology starts in a university lab. Then, a disclosure is made with the university’s tech transfer office and a patent is filed with the hopes that the product can be taken out into the market (by, for instance, a new startup). More often than not, the vehicle to do this is a licensing agreement.
A licensing agreement is important because it shows investors the company has exclusive access to the technology in question. This in turn allows them to attract the investments required to truly grow the company: hire a team, build strategic partnerships and conduct additional studies.
But that doesn’t mean jumping right to a full-blown licensing agreement is the best way to start. An option agreement is often the better move.
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