RebelBio is the Cork success story that got away

28 Sep 2018

SOSV general partner Bill Liao. Image: SOSV

SOSV’s Bill Liao believes that in computer history terms, we’re reaching the Pentium era of synbio and could soon be in the iPhone era. He talks to John Kennedy.

“There is a thousand times more attention on GDPR than there is on DNA, and it is crazy,” sighed Bill Liao, general partner of SOSV and co-founder of CoderDojo, lamenting the lack of interest among governments and institutional investors in the rising field of synthetic biology (synbio).

He is particularly rankled by the fact that RebelBio, an accelerator that was started in Cork in 2014, had to shift location to London to go where the investment is happening. SOSV continues to operate in Cork, but RebelBio was born in Cork. And it got away.

‘I’m still frustrated that people haven’t woken up to the miracle that happened in Cork. It was the first accelerator programme in the world for life sciences and we couldn’t keep it there’

Last year, Sean O’Sullivan’s venture capital (VC) firm SOSV’s IndieBio synbio accelerator topped CB Insights’ list of the most active investors in this new space for disruption. According to life sciences analyst Calvin Schmidt, the Cork and San Francisco venture firm is still the world’s leading investor in synbio, surpassing even Microsoft co-founder and former CEO Bill Gates as well as tech investor stalwarts Khosla Ventures and Y Combinator.

SOSV has had its eyes on synbio for the past five years, creating two accelerators – IndieBio in San Francisco and RebelBio in Cork – making it one of the earliest VC firms to pay attention to an area that could transform everything from healthcare to food and more.

RebelBio was in fact a world pioneer for life sciences accelerators, but it has since moved to London because of a lack of institutional interest in Ireland, and because that’s where most of Europe’s life sciences investment is happening.

Cork’s loss is other cities’ gain, it seems, as the state of New York is to invest $25m to enable SOSV to establish IndieBio in Manhattan, with plans to support 20 life sciences start-ups a year.

The age of miracle drugs

Liao is passionate about the potential of synbio. “When we democratised the mapping of genomes by reducing costs, we opened up the map to every one of the human genomes and the many microbial genomes, and there was so much data that we couldn’t get a handle on it. But now, with machine learning and AI, we are building models of what everything does within a genome.”

What this portends, he said, is the possibility to do the impossible. “Frankly, health-wise, there is no health condition that cannot yield to an intervention microbial or otherwise in a genome. The revolution is so great that it is very difficult to encompass this within any single industry. I would say that it is a kind of shifting in the mantle of power from IT and traditional technology, to the full expression of the power of microbiology.”

Crucially, Liao believes there are potentially no health problems that could not one day be solved through synbio. But he laments the lack of attention governments are paying to the fast-emerging new era of digital and biotechnological innovation. “There are still plenty of ivory towers out there.”

It is clear that RebelBio is the Cork success story that got away. While SOSV maintains offices in Cork and many of its original young cohort remain in Cork, the reality is nevertheless jarring when you consider the success of some of these start-ups so far.

Close to 50 early-stage companies have participated in RebelBio and a number have gone on to raise significant funds. One of the graduates of the first batch, Perfect Day Foods, recently raised nearly $25m earlier this year to develop synthetic animal-free milk. Another graduate company, Hyasynth Biologicals, which has genetically engineered yeast to create a range of cannabinoids for therapeutic purposes, has raised $10m in strategic investment.

“Our first cohort in Cork had 30 applicants and six of them were selected for the first accelerator. Four of those companies have gone on to be successful, which is a pretty good proportion for the first accelerator.

“In our latest batch in London, we selected eight companies out of 560 applicants and that just tells you something. Most of these were great and it proves what we predicted: the democratisation of this technology. It is getting into the hands of earlier-stage start-ups, it is being productised rapidly but, at the same time in terms of development, we have barely scratched the surface. In computing history terms, we are still in 1979 in terms of synthetic biology.”

I put it to Liao that one of the refreshing things about RebelBio was that it pretty much brought innovation from all over the world to Cork and now London. “We don’t discriminate against things that don’t matter like gender, class, race, region or religion. From a business perspective, discriminating against those things that don’t matter just cuts you off from really good deal flow,” he said.

It is this logical and open-minded approach to investment that has set SOSV apart and enabled it to create investment funds worth more than €300m to invest in compelling entrepreneurs. One of its recent exits was US bike-sharing start-up Jump Bikes, which was bought by Uber for $200m.

But he has a point about tectonic plates shifting from chips and circuits to microbials and genomes.

“The computer industry was engineers with some college, or a lot of college, or engineering graduates who leapt into the computer industry and built it. It was enthusiasts who had the engineering chops to make stuff that built it.

“With us, it is scientists. Biology is just a lot more complicated than engineering, so you have to have a lot of smarts to actually make stuff that makes business. My job is to bring scientists from the academic covenant and introduce them into the entrepreneurial covenant. And honestly, we’ve had a lot of success turning scientists into entrepreneurs. Conversely, I’ve had no success turning salespeople into scientists.”

Liao said the decision to move RebelBio in 2017 to London from Cork was a difficult one but, ultimately, the accelerator had to go where the money was. In London alone last year, it is estimated that around $1bn was raised by life sciences start-ups. However, Liao said that finding local investment for promising companies in the areas of life sciences and biotechnology was challenging.

A design for life sciences

Liao said that while Enterprise Ireland is a co-investor in SOSV’s Ireland fund, getting the life sciences division of the agency to invest in synbio start-ups was challenging.

The problem, he believes, is that there is too much of a focus on bigger investment rounds in later-stage companies in biotech. “But, if you are going to invest in start-ups, you’ve also got to be able to write a €50,000 or €100,000 cheque.

“And that was a big reason we brought RebelBio to London. I would happily bring some of the programme back to Ireland if I could get more support. I’ve had more support in one year from UK Trade & Investment than we had for the history of RebelBio in Cork from EI’s life sciences division.”

The crucial problem, he worries, is that the synbio revolution could be missed in Ireland, despite the country hosting one of the world’s pioneering life sciences accelerators.

“In computing industry terms, we are in 1979. But we will be in the Pentium era of synthetic biology within two years and the iPhone era within three years. Not only are we in the early stages, but we are accelerating much faster because of the abilities of AI and engineering.”

He cited one of RebelBio’s London cohort, DropGenie, a Canadian gene editing start-up that can create an entire chimeric antigen receptor T cell (CAR-T) sequence on a single chip to help cure leukemia. CAR-T sequencing – modifying immune cells from a human body using CRISPR – can be expensive and complex work. DropGenie has reduced the complexity tenfold.

“This is a force multiplier. We timed the start of our focus into synthetic biology very early, and even members of our team were skeptical, but we have been proven right.

“The problem is, governments and investors are not paying enough attention to this new value creation era. They may as well be investing in Digital Equipment Corporation when you’ve got Apple next door.”

So, would he bring RebelBio back to Cork? Liao, who applied for Irish citizenship in December last year and is still waiting for a reply, thinks for a moment.

“I’m still frustrated that people haven’t woken up to the miracle that happened in Cork. It was the first accelerator programme in the world for life sciences and we couldn’t keep it there.

“I am not going to bring it back, but I would like to spin something up again.”

Disclosure: SOSV is an investor in Silicon Republic

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