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Past Cleantech Investment:
In the past, cleantech investment has faced a number of difficulties.
Many companies took more time and capital to commercialize and get a value inflection point than people expected. It often needed to build manufacturing facility, which was a significant burden for young companies, in regards to generating commercial revenue and scaling business. Especially, if products, including basic materials and electricity, were at commodity market, it tended to take a long way to be cost competitive. Unfortunately, due to its capital intensity and/or required longer timeframe of commercialization, many companies have been led into challenging positions. As a result, many VCs have been shy away from the sector.
"The industries around synthetic biology is still at early stage"
New Innovation, such as synthetic biology, changes dynamics of investment:
There have been profound advancements in technologies over times especially in the biotechnologies and information technologies space. The advancements are creating a significant impa c t on an area of sustainability and may open up new opportunities & models. Synthetic biology may be one of emerging technologies and is deemed as a new approach of biology with engineering principles. It aims at the design and fabrication of biological components and systems that haven’t existed in the natural world yet. Environmental and health concerns have fueled an interest in the engineered approaches. According to SynBioBeta, Synbio startup has attracted close to $4B capital last year. Investors are getting excited to fund breakthrough biotechnologies that unlock the potential. Synthetic biology can apply for a variety of applications, not only healthcare, but also personal care, food & nutrition, agriculture, materials, fuel and others. With genome editing tools like CRISPR, AI & machine learning, and others, such as DNA synthesis and automation, which are becoming economically available, it can expand exponentially the possibility to find new solutions faster. For example, the new method has enabled to make complicated molecules like new zero-calorie sugar substitute and animal free collagen which are desired, but unable to make at industrial setting. They could meet needs of functional and health benefits, which are higher value, in addition to sustainable benefit.
There is a major trend of shifting from internal innovation to external innovation. Large corporates in multiple industries, such as energy, chemical, agriculture & food, healthcare and others, are willing to collaborate with startups now. Also, multiple governments, including EU countries, Canada, and others, which certainly play an important role in the ecosystem, are supportive for synthetic biology and bioeconomy. Those trends and supports are stimulating the growth of the ecosystems.
The industries around synthetic biology is still at early stage. A number of bright people have been working hard to overcome a variety of challenges, including scale-up and new application development which is typically long process.
There are a few things I would like to emphasize.
1) Interact with a potential customer earlier
It is always crucial to strategically identify a right market/ application and opportunity to create business at reasonable timeframe.
2) Focus on your core competency
Consider leveraging a capability already existed
3) Team, team, team!
Brining people who are smarter than you. Doing venture is highly demanding task with significant complexity.
Finally, entrepreneur’s passion & vision is always the most important element of contentiously driving a project, attracting people, capital, partners & customers, and making it reality.
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