Photo by Mariano Pascual at The Economist.

Molecular and Cellular Factories

Shelby Newsad

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Molecular and cellular factories have the potential to transform the way we eat, dress, bathe, build, cure disease, and decorate. The space is rapidly evolving so to keep track of new trends, I have compiled a list of 75+ Molecular and Cell Factories that are Pre-Seed to Series A at the time of publication.

I first sought to create categories by 1) type of chassis; 2) type of product. The (1) type of chassis ranges from bacteria, fungi, plant cells, algae, zombie cells to cell-free systems. The (2) products are also diverse but can be largely lumped into molecular-made food/drink, pharmaceuticals/nutraceuticals, and non-edible commodities groupings.

Each company is working against regulation, scalability, margins, and industry incumbents, and public sentiment regarding potentially genetically modified organisms (GMOs). Companies with a much higher margin (pharmaceuticals and nutraceuticals) are impeded by stringent guidelines and quality assessments. These are absolutely necessary as they keep the consumer safe, but it does lengthen the commercialisation process. Non-edible commodities may have lower regulation but are directly competing against, in many cases, crude oil derived products. This is true for many soaps, vinyl flooring, and polyester, all of which are made from crude-oil derivatives. Companies disrupting this space are using mycelium (fungi) to make acoustic panels and floors (MOGU), cells/bacteria to make sustainable fabrics (Galy, Modern Synthesis), and cells to make non-petroleum derived soaps (Dispersa).

Historically, we’ve seen commodity synthetic biology investment and sentiment wax and wane with an underpinning metric: crude oil price per barrel (discussed in depth in Hope in Hell). For example, when crude oil was >$100 per barrel, biofuels were financially plausible with the United States military flying a ‘Green Fleet’ using 50% jet fuel and 50% algal-made oil. Sadly, The companies responsible, Solazyme and Sapphire, went from their peak in 2011 when crude oil was at $120 per barrel to a precipitous demise in 2015 with crude oil at $45 a barrel. Both went out of business in 2017. Although this is certainly a cautionary tale and evidence that inappropriately low carbon prices stifle green innovation, there may be hope. Indeed, the price of crude oil has been increasing in recent years (as seen in Figure 1) which could entrench enthusiasm for synthetic biology-made commodities, especially those in direct competition of crude oil derived products.

Figure 1: Average cost of crude oil per year from 1976 to 2022. Graph from Statista.

Food commodities made which are partially synthetised by microbes have different market underpinnings as they are competing against incumbent food producers. Knowledge regarding the climate impact of meat and dairy production, animal welfare, and potentially harmful health effects of a high meat and dairy diet have engendered a food revolution. This revolution first started with black bean burgers which were cost competitive, ameliorated ethical concerns, but were not the pinnacle of taste. The second alt-food wave was from companies like Impossible Foods and Beyond Meat which gave an ethical and taste competitive product to the traditional ‘burger’, but lacked in nutrition. The third wave is a combination of high-tech fermentation technology and data science to produce healthier and more sustainable alt-meat, alt-dairy, and alt-coffee, without compromising on taste. In the list, there are a particularly large number of companies in the foodtech space with sustainable alt-meat (Eternal Mycofood, Fable), alt-cheese (Formo, Grounded Foods), alt-dairy (Tezza, De Novo Dairy), alt-coffee (Compound and Atomo), and food x data science aficionados at Climax Foods.

Tangentially interesting are the numbers of product agnostic companies which will likely run as a contract research and/or manufacturing organisations (CRO/CMO). This model has been taken by many synthetic biology behemoths (Ginkgo, Zymergen, Amyris) and proven to be a difficult business case for profitability. Although these early struggles have been difficult for the field, Solugen just might have cracked the code with its massive cell-free manufacturing success. In this vein, companies that could use this tailwind range from cell-free synthesis companies (EnginZyme and Debut) to companies able to model production itself (EV Biotech). I predict these will develop deep expertise and data pools in-house which will give them the uniquely best chance to outcompete the incumbent unsustainable goods. For many product agnostic companies listed below, I believe the first customers will be in the pharmaceutical and nutraceutical space. This would allow for higher margin products in an area where there is clear market need in an ever-growing space. Some companies that are focusing on this space entirely have had incredible initial success (Resilience, Cellino, Asimov and Dyno Therapeutics). The tailwinds of these now semi-proven business models of robotics, automation, and data science can be used by up- and coming companies.

Additionally, several cannabinoid and psychedelic fermented products can enable the booming psychedelic pharmaceutical industry. Atai Life Sciences, Cybin, Mind Medicine, and Seelos Therapeutics have become giants with a combined market capitalisation of over $3 billion. These can be underpinned by high-tech psychedelic and cannabinoid companies such as Octarine Bio, CB Therapeutics, Demetrix and Hyasynth Bio which are all in the list.

In other words, molecular and cell factories have the potential to out compete old, unsustainable industries (like petroleum and meat-based) and underpin burgeoning ones (like the psychedelic pharmaceutical and cell/gene therapy). This enormous flexibility has led to this century being labeled as the ‘Century of Biology’. This is yet to be proven, but simple extrapolation of the list below makes one feel that we just might have some hope.

This list is not exhaustive, so if I’ve missed something important, please do email me, Shelby Newsad (shelby@hummingbird.vc).

Shout-out to Tess van Stekelenburg for really improving this article!

We’re ever open for suggestions on how to make v2 even better.

~ Made at Hummingbird Ventures ~

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