SynBioBeta & Silicon Valley Bank report shows strong growth in venture funding
San Francisco, October 2, 2018 (Newswire.com) - SynBioBeta today announced the release of its 2018 Synthetic Biology Annual Investment report, which analyzes synthetic biology investments from 2015 to 2018. The report, co-authored with Silicon Valley Bank, shows that venture funding for the first eight months of this year grew 73 percent from last year, with a trend toward bigger deals.
Counting only deals closed by early August, a total of $1.8 billion in venture funding has gone to synthetic biology companies.
Over the past four years, at least half of the funding has gone to later stage companies, suggesting that mature companies are continuing to expand. While 2017 saw a slight decrease in funding relative to the other years, it also saw the greatest number of companies funded in any of the four years, suggesting a new wave of early-stage startups bringing with them continued growth and innovation.
“As we look at the data from 2015 to 2018, it becomes clear that the synthetic biology industry will continue to attract the attention of investors,” says Mark Bunger, the report’s lead author. “The industry is thriving, with a mix of proven, mature companies and early-stage startups that are proving to their investors that their money is well spent. The innovation we are seeing is huge, and I’m excited to see what the future holds.”
Valuations in 2018 also exceeded those seen in 2017 by nearly a factor of ten.
Some companies had a outsize impact on the report. Moderna Therapeutics, for example, is a biotherapeutics company that makes messenger RNA to treat a wide variety of conditions. While its technology is squarely within the synthetic biology realm, the scale of its business dealings resembles traditional pharma. If data from Moderna is excluded, then the 2018 data are a bit steadier year-to-year. Cases like Moderna, according to the report authors, are instructive for explaining how investors should think about synthetic biology as a category and as individual firms.
”Investors must keep in mind the distinction between applications and tools in assessing synbio investment,” says Brandon Clark, Vice President at Silicon Valley Bank, who will be speaking about the report at the SynBioBeta conference today in San Francisco. “Companies using synthetic biology for a particular application should be valued in a more traditional way with attention to the market size and share in particular.”
That’s a very different proposition than companies making the tools that enable
synthetic biology, the authors contend. Companies like Twist Bioscience, Caribou Biosciences, and Synthace are literally creating markets that did not exist before, requiring investors to understand their technology as well as their end market.
The report reveals that of the over 500 investors in the synthetic biology space, a small proportion (ten) are especially active, participating in 95 of 187 total deals. The report goes into depth on four major segments of tool development in synthetic biology: computational design, CRISPR editing, DNA/RNA synthesis, and organism engineering. The report closes with three recommendations for investors who wish to make their mark in the synthetic biology space.
“Here at SynBioBeta, we aim to bring together a community of investors and entrepreneurs who together can change the world through synthetic biology,” says John Cumbers, CEO of SynBioBeta and a report author. “Our annual industry report is one of the most useful tools we can provide to the community. As we look forward, I am excited about the prospects for 2019, and I hope that together we make it even better than 2018.”
You can download the report from the SynBioBeta website.
SynBioBeta is the leading community of innovators, entrepreneurs, investors, and enthusiasts devoted to the responsible growth of the synthetic biology field. The company hosts international synthetic biology conferences and events that bring synthetic biology community together several times each year, giving anyone the opportunity to meet with the bright minds building and shaping the bioeconomy.
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