Organism design shop Ginkgo Bioworks has raised $100 million and ordered 600 million base pairs of synthetic DNA. The deals bring the total raised by the company over the past 15 months up to $154 million and its synthetic DNA order over the past 7 months up to 700 million base pairs, a total the company thinks equals 70% of all the material produced last year.
Those figures show the speed with which Ginkgo, a company that engineers microbes to produce ingredients, and the synthetic biology sector as a whole are moving forward. Ginkgo largely flew under the radar in its early years, before a stint at seed accelerator Y Combinator and fast-escalating financing rounds--$9 million, $45 million and $100 million in 15 months--thrust it into the limelight. Along the way it has become a voracious consumer of synthetic DNA, tapping Twist Bioscience and George Church’s Gen9 for 700 million base pairs since November.
Ginkgo is funneling the DNA and money into its 18,000-square-foot biofoundry in Boston, MA, at which it creates microbes that produce ingredients at the request of its customers. A second facility occupying some of the 70,000 square feet of additional space Ginkgo recently leased is due to start operating in the third quarter of this year. The scaling up of output is taking place in parallel to a broadening of the end markets targeted by Ginkgo, activities that both motivated the Series C round.
“This is funding to expand on what we had started doing with the Series B, which was moving out from flavors and fragrances,” Ginkgo CEO Jason Kelly told FierceBiotech. Ginkgo started out making microbes that produced ingredients of interest to flavor and fragrance companies. That focus shifted with Ginkgo’s Series B-driven expansion 11 months ago, when it flagged up pharma, cosmetics and probiotics as three of the markets in which it wanted to grow its business.
Since then, cosmetics has joined flavors and fragrances on the list of industries that Ginkgo sees as its main areas of activity, but pharmaceuticals remains a comparatively small part of its operation. “It's a minority of what we're doing right now,” Kelly said. “We've started to do work in APIs. And we're starting to do our first projects around … helping people who work with antibodies and protein therapeutics in general.”
Ginkgo is looking to expand these activities, but the plan is to support the work of drug developers, rather than get into the business itself. “I think it's unlikely we would develop new therapeutics, it's just not the bones of the company,” Kelly said. “What we want to do is essentially consolidate all the genetic engineering that might be happening across any industry … through our foundry and through our design software.”
That proposition has proven attractive to investors with a foothold in life sciences. Ginkgo relied on Y Combinator and other tech investors for seed funding and its Series A. That reliance ended with the Series B, which was led by Viking Global 6 months after it helped Moderna Therapeutics to a $450 million round. The Series C round continues the move away from pure tech VCs by adding Baillie Gifford, Bill Gates’ Cascade Investment and Senator Investment Group to the list of investors in Ginkgo.
Those new backers are active in life sciences. Baillie Gifford lists Roche ($RHHBY)-backed cancer analytics firm Flatiron Health and German mRNA specialist CureVac among its investments. Senator has put money into Adaptive Biotechnologies, a company that has built its business upon B and T cell profiling. And Cascade has a history of backing computational drug design shops, including Nimbus Therapeutics, a company best known for landing a $1.2 billion deal with Gilead ($GILD) in April.
As Kelly sees it, while the end markets targeted by Ginkgo may be outside of the core areas of focus at some of these investment teams, the tools it is using are familiar. “Even though the primary focus isn't necessarily developing a new therapeutic, it is fundamentally leveraging the same underlying technology that the biotech and pharmaceutical industries use,” Kelly said.
“These investors really understand the technology better than a traditional tech investor, but the markets are different. We're seeing more of these public market healthcare investors getting into synthetic biology.”
To date, Ginkgo, which faces competition from rival synthetic biology upstarts such as Zymergen, has tapped into this trend more effectively than other players in the nascent industry, enabling it to amass a sizable amount of investment dollars. Now, the challenge is to use that financial fuel to execute its plans.
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