Zymergen
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4 sustainable industries where founders and VCs can see green by going green
Now’s the time for sustainable investments to shine. There are billions of dollars in funding in both public and private markets dedicated to new sustainable investing and demand for consumers for a more conscious capitalism has never been stronger.
As founders and investors reawaken to a sustainable morning in America a few areas are going to demand hardware, software and business model innovations.
Some of these sectors have been on the investment radar for the past year or two and others are just beginning to capture investor attention, but they all have something in common: the investor appetite for new businesses addressing the food supply chain; energy management and construction for homes and offices; carbon sequestration and monitoring and management of offsets; and new biomaterials and processes for packaging and industrial chemicals replacements have never been stronger.
If we’re going to feed the world, let’s start with the food chain.
COVID-19, the disease caused by the SARS-CoV-2 virus, has exposed significant holes in the food supply. Companies like AppHarvest, which agreed to go public through a SPAC earlier this year are only one of several companies remaking agriculture through the application of technology. There’s also Plenty, Bowery Farms, Unfold, BrightFarms and Revol Greens, working to upend the agricultural supply chain. If those companies are looking at new ways of growing crops, companies like Apeel Sciences and Hazel Technologies are trying to find ways to preserve food from spoilage. Treasure8 is looking at ways to use food waste for new food and ingredients and they’re not alone.
Then there’s the protein replacement companies that we’ve written about previously. Impossible Foods, Beyond Meat, Memphis Meats, Mosa Meat, Nuggs, Future Meat Technologies, Shiok Meats (a seafood company) are devising methods to create meaty proteins less dependent on animal husbandry. Perfect Day and its competitors are doing the same for the dairy industry.
There’s also tremendous need for new protein sources to feed the animals that people around the world still like to eat. For this there’re companies like Ynsect, which is providing insect proteins for industrial fish farms, or Grubly Farms, which is providing feed to the families raising their own chickens.
For these opportunities that are raising hundreds of millions in financing there are others that require the kind of high margin software solutions that are yet to be developed. These are visual technologies for tracking, monitoring and managing food production; sensors for improving the storage and supply chain, software for managing production and tracking produce and products from the farm to the table. Venture investors are beginning to invest in these companies as well.
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Synthetic biology startups are giving investors an appetite
There’s a growing wave of commercial activity from companies that are creating products using new biological engineering technologies.
Perhaps the most public (and tastiest) example of the promise biomanufacturing holds is Impossible Foods . The meat replacement company whose ground plants (and bioengineered additives) taste like ground beef just raised another $200 million earlier this month, giving the privately held company a $4 billion valuation.
But Impossible is only the most public face for what’s a growing trend in bioengineering — commercialization. Platform companies like Ginkgo Bioworks and Zymergen that have large libraries of metagenomic data that can be applied to products like industrial chemicals, coatings and films, pesticides and new ways to deliver nutrients to consumers.
The new products coming to market
In fact, by 2021 consumer products made with Zymergen’s bioengineered thin films should be appearing at the Consumer Electronics Show (if there is a Consumer Electronics Show). It’s one of several announcements this year from the billion dollar-valued startup.
In August, Zymergen announced that it was working with herbicide and pesticide manufacturer FMC in a partnership that will see the seven-year-old startup be an engine for product development at the nearly 130-year-old chemical company.
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The AI market is growing, but how quickly is tough to pin down
Holden Page is an editor and journalist at Crunchbase News.
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If you work in tech, you’ve heard about artificial intelligence: how it’s going to replace us, whether it’s over-hyped or not and which nations will leverage it to prevent, or instigate, war.
Our editorial bent is more clear-cut: How much money is going into startups? Who is putting that money in? And what trends can we suss out about the health of the market over time?
So let’s talk about the state of AI startups and how much capital is being raised. Here’s what I can tell you: funding totals for AI startups are growing year-over-year; I just don’t know precisely how quickly. Regardless, startups are certainly raising massive sums of money off the buzzword.
To make that point, here are just a few of the biggest rounds announced and recorded by Crunchbase in 2018:
- SenseTime, a China-based startup that is quite good at tracking your face wherever it may be, raised a $1 billion Series D round. It was the largest round of the year in the AI category, according to Crunchbase. But what’s more mind-blowing is that the company raised a total of $2.2 billion in just one year across three rounds. A picture is worth a thousand words, but a face is worth billions of dollars.
- UBTech Robotics, another China-based startup focusing on robotics, raised an $820 million Series C. Just a cursory look at its website, however, makes UBTech appear to be a high-end toy maker rather than an AI innovator.
- And biotech startup Zymergen, which “manufactures microbes for Fortune 500 companies,” according to Crunchbase, raised a $400 million Series C.
Now, this is the part I normally include a chart and 400 words of copy to contextualize the AI market. But if you read the above descriptions closely, you’ll see our problem: What the hell does “AI” mean?
Take Zymergen as an example. Crunchbase tags it with the AI marker. Bloomberg, citing data from CB Insights, agrees. But if you were making the decision, would you demarcate it as an AI company?
Zymergen’s own website doesn’t employ the phrase. Rather, it uses buzzwords commonly associated with AI — machine learning, automation. Zymergen’s home page, technology page and careers page are devoid of the term.
Instead, the company focuses on molecular technology. Artificial intelligence is not, in fact, what Zymergen is selling. We also know that Zymergen uses some AI-related tools to help it understand its data sets (check its jobs page for more). But is that enough to call it an AI startup? I don’t think so. I would call it biotech.
That brings us back to the data. In the spirit of transparency, CB Insights reports a 72 percent boost in 2018 AI investment over 2017 funding totals. Crunchbase data pegs 2018’s AI funding totals at a more modest 38 percent increase over the preceding year.
So we know that AI fundraising for private companies is growing. The two numbers make that plain. But it’s increasingly clear to me after nearly two years of staring at AI funding rounds that there’s no market consensus over exactly what counts as an AI startup. Bloomberg in its coverage of CB Insights’ report doesn’t offer a definition. What would yours be?
If you don’t have one, don’t worry; you’re not alone. Professionals constantly debate what AI actually means, and who actually deserves the classification. There’s no taxonomy for startups like how we classify animals. It’s flexible, and with PR, you can bend perception past reality.
I have a suspicion there are startups that overstate their proximity to AI. For instance, is employing Amazon’s artificial intelligence services in your back end enough to call yourself an AI startup? I would say no. But after perusing Crunchbase data, you can see plenty of startups that classify themselves on such slippery grounds.
And the problem we’re encountering rhymes well with a broader definitional crisis: What exactly is a tech company? In the case of Blue Apron, public investors certainly differed with private investors over the definition, as Alex Wilhelm has touched on before.
So what I can tell you is that AI startup funding is up. By how much? A good amount. But the precise figure is hard to pin down until we all agree what counts as an AI startup.
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These cities in California’s East Bay are raking in venture capital
San Francisco Bay Area companies raise so much venture capital relative to other places that a lot of little-known cities in the region outrank major metropolises in total funding. In this two-part series, we’ll look at nine under-the-radar places in the Bay Area that punch above their weight class when it comes to attracting startup funding. For today, we’ll focus on the East Bay. Read More
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