Venture Biotech

Why do Investors invest millions in creating new microbes

Matthew Herper, Forbes, 12/20/2017
Translated by Anton Bundin

Almost ten years ago, the editorial board of Forbes commissioned an article on the influence of the "do-it-yourself" philosophy (thanks to it, by the way, the corresponding business culture was born later) on various spheres of professional activity. I was sent to a meeting with a group of scientists from the Massachusetts Institute of Technology who intended to hack and change the usual course of life. Their main goal was to find a simple way to develop new living microorganisms. One of the band members, Jason Kelly, told me at the time: "Sitting at a table in a cafe, two people can start an Internet company. And we want to prove that this is also possible in biotechnology."

Now a group of these biologists claims that their company Ginkgo Bioworks has attracted $275 million in investments from companies such as Viking Global, the Continuity funds of the incubator Y Combinator and Cascade Investment of Bill Gates, as well as General Atlantic, founded by billionaire and co-founder of Duty Free Shoppers Charles Feeney. In total, Ginkgo has received $429 million at the moment, and sources familiar with the results of the last round reported that the company is already valued at $ 1 billion.

Almost ten years ago, the editorial board of Forbes commissioned an article on the influence of the "do-it-yourself" philosophy (thanks to it, by the way, the corresponding business culture was born later) on various spheres of professional activity. I was sent to a meeting with a group of scientists from the Massachusetts Institute of Technology who intended to hack and change the usual course of life. Their main goal was to find a simple way to develop new living microorganisms. One of the band members, Jason Kelly, told me at the time: "Sitting at a table in a cafe, two people can start an Internet company. And we want to prove that this is also possible in biotechnology."

Now a group of these biologists claims that their company Ginkgo Bioworks has attracted $275 million in investments from companies such as Viking Global, the Continuity funds of the incubator Y Combinator and Cascade Investment of Bill Gates, as well as General Atlantic, founded by billionaire and co-founder of Duty Free Shoppers Charles Feeney. In total, Ginkgo has received $429 million at the moment, and sources familiar with the results of the last round reported that the company is already valued at $ 1 billion.

Kelly, who now holds the position of CEO, says: "We are very enthusiastic about fulfilling the company's mission. In fact, we are continuing the work started at the Massachusetts Institute of Technology in 2002. We started doing these studies as a single team from the moment we received our PhD degrees. We had to go through a lot, but we are convinced that the engineering component is extremely important in biology."

In 2009, Kelly and his associates were ordinary graduate students. They were gathered into one team by Tom Knight, a computer genius, who drew attention to the possibility of a hacker approach to the usual biological mechanisms. They founded the company not at the university, but on their own site. By 2014, the team managed to launch the enterprise thanks to grants from the Office of Advanced Research Projects (DARPA) of the Ministry of Defense, the US Department of Energy and other government departments. In the summer of 2014, the company joined Y Combinator and began to receive large sums in the form of investments.

Ginkgo's first flavor additive went into mass production this year, but they don't say which one. Last year, the company established a joint venture with the pharmaceutical giant Bayer (the transaction amount was $ 100 million). The new company is developing microorganisms to improve the characteristics of agricultural crops. About a week ago, Ginkgo announced a partnership agreement with the biotech company Synlogic, which develops microorganisms that can live in the human intestine and treat diseases of the gastrointestinal tract. Ginkgo now has 160 employees.

The group of scientists, including mentor Tom Knight, remained unchanged. Kelly describes the history of the team in biological terms: "they isolated themselves and followed their own path of evolution." Kelly himself is now responsible for the financial aspect of the company, and about 20% of employees report directly to him. Reshma Shetty focused on organizational and managerial issues — the remaining 80% are in her charge. Barry Canton, Shetty's husband and Kelly's former roommate, is in charge of technology development. Austin Che, responsible for quantitative analysis, monitors the correctness and efficiency of calculations. What heights will Ginkgo reach in two years, especially since DNA printing and sequencing are now developing by leaps and bounds?

Kelly believes that it is impossible to destroy their collective. They are all friends, their children play with each other, and they themselves have become highly interdependent, like algae and bacteria in lichens. Kelly explains: "If you swing only the right hand, the left atrophies. This happened to me in the technical aspect. So now Barry and I are very dependent on each other professionally."

The huge funds raised by Ginkgo are just a separate case of a broader trend: the entire field of synthetic biology is now actively attracting investment. In July, the SynBioBeta community, which covers all the events taking place in this area, reported $0.5 billion of investments from public and private investors in the field of synthetic biology, collected by 22 companies. At the same time, for the whole of 2016, the volume of investments amounted to $900 million. Big money is now being invested not only in the usual sector of clinical medicine. A few months ago, Bolt Threads, a company planning to produce fiber using biotechnology, raised an investment of $ 100 million. Bill Gates' Cascade Investment has invested in Memphis Meats, which plans to grow meat from cages ($17 million investment in August), and Impossible Foods, which produces meat-flavored vegetarian burgers ($75 million in August).

The hype, it seems, will not subside soon. Owners of private capital are extremely excited by the idea that biological mechanisms can be created or modified at their own discretion. The other day Andreessen Horowitz, the famous venture capital fund, announced the allocation of $ 450 million for startups engaged in developments at the intersection of biology and technology. Jorge Conde, partner at Andreessen Horowitz, who founded the first company of its kind a few years ago to provide customers with complete information about their genome, says: "The main thing here is not computer computing, but the advantage of targeted development over random discovery." Vijay Pande, a pioneer in the field of artificial intelligence and another partner of the foundation, believes: "We are at the stage of biology development where computer science was 50 years ago. With our investments, we hope to achieve the same sharp jump in the development of the biotechnology industry."

Portal "Eternal youth" http://vechnayamolodost.ru