Ginkgo Bioworks, a startup genetically engineering microbes for partner companies in the flavor, fragrance and food industries, has raised $100 million in Series C funding from a variety of late-stage investors.
Clients include ingredient companies looking for help in the creation of natural flavorings, or perfume companies creating scents. It’s also worked with nutraceutical companies.
The Boston-based company, which launched out of tech accelerator Y Combinator in 2014, has set its sights on the agriculture industry too, and is currently working on a pest-control agent with an agribusiness.
“We are very interested in speaking to interested agriculture companies,” said Jason Kelly, co-founder of ‘The Organism Company.’
“There are regulatory questions to address with agriculture relating to the use of GE ingredients, which has held us back a bit, but ag companies will know more than us on this point. We’d be happy to take on the risk of development if they want to try something; we’d love to hear from them.
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Ginkgo’s microbe designers write new DNA code that will re-program the genome of a microbe to have it do what customers want using proprietary in-house software. The DNA designs it creates are also proprietary to Gingko, as well as the robotics and other technology the company uses to culture the microbes, mostly through a fermentation process.
These microbes are primarily forms of yeast or bacteria that Ginkgo’s customers can use to make specialty chemicals are often too expensive through other means. Kelly gave the example of rose oil, which would be expensive to manufacture given that roses are not a commodity crop.
Ginkgo’s software and robotics approach is what appealed to Y Combinator, which is usually associated with funding software startups, and made it the accelerator’s first biotech company, said Kelly.
“At YC, we have invested in more and more ‘hard tech’ companies like Ginkgo in the past few years,” said Sam Altman, president of Y Combinator, in a recent statement about the funding. “There has never been a better time to take a long-term view and use technology to solve major problems, particularly with the advancements happening in synthetic biology.”
The Series C round was led by Senator Investment Group, which is a New York-based hedge fund.
Senator Investment Group was joined by new investors, all of which focus primarily on the public markets, Cascade Investment, Baillie Gifford, and Allen & Company, as well as Viking Global Investors which led the Series B round. Y Combinator’s Continuity Fund also invested.
Existing investors that didn’t commit to this round include Data Collective, Felicis Ventures, OS Fund, Vast Ventures, and Eleven Two Capital.
“We partnered with venture folks in the A round, but since our awesome commercial traction in the last 18 months, we are now passing the venture stage and most of our new investors are large public market investors.”
The decision to align with public market investors also reflects the direction Kelly and his co-founders are taking the company; towards an eventual public listing.
‘We are a stand alone company so we don’t see a strategic acquisition in our future,” he said.
Ginkgo will use the proceeds to purchase 600 million base pairs of manufactured DNA over the course of the next few months, depending on the demand of its clients.It will buy them from Twist Bioscience and Gen9, leading providers of synthetic DNA. This amounts to 60% of the total purchased DNA in 2015 and makes it the largest consumer of synthetic DNA in the world, according to Kelly.
The new round of investment takes Ginkgo’s total capital raising efforts to $154 million.
Another startup manipulating microbial DNA for industry is Zymergen, which counts Data Collective, Innovation Endeavors, Obvious Ventures, and Draper Fisher Jurvetson among its investors.
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