Data Snapshot is a regular AFN feature analyzing agrifoodtech market investment data provided by our parent company, AgFunder.
Bioenergy and Biomaterials was one of four agrifoodtech categories that bucked the global venture capital decline in 2022 by posting a 14% year-over-year increase in startup funding to $2.2 billion, according to the latest Global Agrifoodtech Investment Report from AgFunder.
The category includes a range of startups working to replace synthetic, fossil fuel-based or animal-based products with biological alternatives. The category includes startups creating bio-based energy alternatives to fossil fuels and other materials as well as non-food extraction, processing, feedstock technology, and high-tech cannabis pharmaceuticals.
While bioenergy is nothing new, the development of bio-alternatives to chemicals, plastics, leather and other materials has particularly picked up pace in recent months, dominating the top deals in the category.
As with most agrifoodtech categories, the US is leading the way in the category producing just over half of total funding, with Asian startups coming in second, buoyed by China.
The top funder LanzaTech, a carbon capture and transformation company, went on to list via SPAC transaction on the Nasdaq Stock Exchange.
Top 10 Bioenergy & Biomaterials deals in 2022:
|LanzaTech||US||A company that uses carbon recycling technology to convert organic waste into fuels||$500M|
|Andion Global||CA||A wastewater treatment company and biogas producer||$211M|
|Lygos||US||A biotech company converting cheap and renewable feedstock to high-value, industrial chemicals||$160M|
|Enerkem||CA||A cleantech company transforming solid waste and feedstock into industrial chemicals and biofuels.||$155M|
|Bluepha||CN||A biotech company using fermentation and genetic engineering to produce bio-based chemicals.||$125M|
Two early-stage players to watch that also raised funding during the year are English startup Shellworks and Dutch startup Pectcof. Shellworks is on a mission to replace plastic packaging in the beauty industry with a substance produced via microbial fermentation that “behaves like a natural polyester;” while Pectcof uses coffee pulp (the fruit around the coffee seed/bean) as a source of bio-based materials, “at the same time detoxifying the waste stream produced by the second most traded commodity in the world.”
The market for biomaterials is growing with over 400 possible applications identified by McKinsey in a variety of industries including agriculture, aquaculture and food production.
“These use cases alone—more than half of which fall outside human health—could have direct economic impact of up to $4 trillion a year over the next ten to 20 years,” reads the report.
“Over the next ten to 20 years, advances in the use of biology in the production of materials, chemicals, and energy could amount to $200 billion to $300 billion in global market growth,” according to McKinsey.