IndieBio emerges as the leading investor in synthetic biology start-ups

14 Mar 2017

Artificial seaweed growing in a lab. Image: NChi/Shutterstock

San Francisco and Cork-based IndieBio is leading the pack, as investment in synthetic biology surges past $1bn for the first time.

SOSV’s synthetic biology venture capital firm IndieBio has topped CB Insights’ list of the most active investors in this new space for disruption.

Sean O’Sullivan’s accelerator established IndieBio in 2014, becoming one of the earliest venture capital firms to have discovered a new area of disruption: synthetic biology.

‘Instead of spending $1bn for scientists and entrepreneurs to create, now it can be done to the order of hundreds of thousands of dollars, and create products that accelerate our ability to mimic biology’

Each year since then, IndieBio has run accelerators in San Francisco and Cork (the latter of which is now known as RebelBio) to support local and global entrepreneurs in the space.

Examples of investment areas range from new medicines, allergen-free peanuts, ocean-friendly fish-farming feed, bacteria for treating depression and bioengineered rhino horns to portable genetic testing kits.

Synthetic biology revolution

Indie.Bio tops list of investors in synthetic biology start-ups

Sean O’Sullivan on stage at an IndieBio demo day in Cork two years ago. Image: Connor McKenna

According to CB Insights, IndieBio ranked as the number one most active investor in the space, with 14 investments to date.

Funding of synthetic biology start-ups surpassed $1bn for the first time last year and investors are placing bets on start-ups, developing everything from new food products to fuel-producing bacteria and DNA-based therapeutics.

CB Insights estimates there has been a 135pc increase in the number of investors in the space since 2012.

In 2016, there were 64 new investors in the space. Corporates such as Bayer, Monsanto and Novartis have all made synthetic biology investments in the past five years, alongside smart money VCs such as Khosla Ventures, Andreessen Horowitz and Founders Fund, among others.

IndieBio provides $250,000 in funding as well as lab and co-working space, and mentorship in exchange for 8pc in equity.

The seed-stage biotech accelerator has invested in companies working on synthetic egg whites (Clara Foods), gene synthesis (Genesis DNA), milk production (Perfect Day) and chemical production (Zymochem), to name a few.

Next on the list is Y Combinator (YC), which, in the last two years, has become interested in synthetic biology and has seen investments including Lygos, which engineers microbes to convert sugars into industrial chemicals such as bio-malonic acid.

Meanwhile, Ginkgo Bioworks, one of YC’s first biotech investments and a competitor of Draper Fisher Jurvetson’s portfolio company Zymergen, designs custom microbes to produce scents and flavours, among many other applications.

Other investors in the list include Alexandria, Viking, Flagship Pioneering, Horizons Ventures and SOSV itself.

Seeding the synthetic biology future

SOSV has expertise in building tech companies with a presence in Europe, North America and Asia across domains such as internet of things, life-saving medicines and new sources of nutrition.

The venture capital firm has boasted returns averaging 27pc over the past 15 years.

O’Sullivan’s first venture, MapInfo, grew into a $200m public company. Some of his successful investments to date include Netflix and Harmonix, creator of Guitar Hero and Irish success Storyful.

At an event in Cork two years ago, Sean O’Sullivan described the synthetic biology revolution as a moment in time just before the PC industry took off.

“The price point for creating these organisms that produce the outputs are now possible. Instead of spending $1bn for scientists and entrepreneurs to create, now it can be done to the order of hundreds of thousands of dollars, and create products that accelerate our ability to mimic biology.”

Disclosure: SOSV is an investor in Silicon Republic

Updated, 12.32pm, Wednesday 15 March 2017: This article was updated to clarify that the IndieBio Cork accelerator is now known as RebelBio.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years