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Ginkgo Bioworks to go public at $15bn valuation as agrifood SPAC frenzy continues

May 12, 2021

US synthetic biology startup Ginkgo Bioworks has announced its plan to go public by merging with a special purpose acquisition company (SPAC) in a deal that values it at $15 billion.

The Boston-based biotech is set to combine with Nasdaq-listed Soaring Eagle Acquisition Corp, with the merger expected to provide up to $2.5 billion in cash proceeds.

While most of that comes from Soaring Eagle’s coffers, about a third has been raised via a $775 million private investment in public equity (PIPE) deal from a range of new and existing investors.

Among the PIPE participants are lead investors Baillie Gifford, Putnam Investments, and Morgan Stanley’s Counterpoint Global.

ARK Investment Management, ArrowMark Partners, Bain Capital, Berkshire Partners, Casdin Capital, Franklin Advisers, T. Rowe Price, Viking Global Investors, and Cascade Investment — the private fund of Microsoft co-founder and sustainability advocate Bill Gates — also took part in the PIPE deal.

Early investors in Ginkgo Bioworks that should be able to exit the company after its listing include Viking Global, Y Combinator’s Continuity Fund, Cascade Investment, private equity firm General Atlantic, New York-based hedge fund Senator Investment Group, Baillie Gifford, Data Collective, Felicis Ventures, OS Fund, Vast Ventures, and Eleven Two Capital.

Bill Gates tells Reddit why he’s bought so much farmland – read more here

Founded by a group of MIT alumni in 2008, Ginkgo Bioworks has developed a tech platform that uses synthetic biology, genetic engineering, robotics, data analytics, and software to ‘program’ microbes for different purposes.

Taglining itself as ‘The Organism Company,’ Ginkgo says its ‘engineered biology’ capabilities are relevant in a multitude of industries, from industrial chemicals and food production to agriculture and healthcare.

In food, it established a spin-off company, Motif Ingredients, in 2019 to leverage its tech in order to develop cell-cultured and plant-based proteins for the growing ‘slaughter-free meat’ industry through biotech and fermentation.

Motif raised $90 million for its Series A round from investors including Netherlands-based agrifood firm Louis Dreyfus Company, New Zealand dairy co-op Fonterra, and Breakthrough Energy Ventures – the sustainability-focused fund led by the aforementioned Gates with backing from myriad other billionaires including Jeff Bezos, Michael Bloomberg, Richard Branson, Ray Dalio, Reid Hoffman, Jack Ma, and Masayoshi Son.

On the ag side, Ginkgo has a joint venture with agriculture seed and chemicals company Bayer called Joyn Bio, which is using Ginkgo’s engineered microbes to create biological alternatives to synthetically produced crop inputs like fertilizers and pesticides.

McKinsey estimates that the total market for bioengineered products could grow to as much as $4 trillion in value over the next couple of decades.

“The magic of biology is that cells run on digital code similar to a computer, except that instead of zeros and ones, it’s As, Ts, Cs, and Gs,” Jason Kelly, Gingko co-founder and CEO, said in a statement.

“Ginkgo’s platform makes it easier to program this code, and we are making this platform available to organizations working to solve our most pressing problems. From mRNA vaccines reaching people’s arms to combating climate change, the opportunity to work with programmed cells has never been more apparent.”

The company said it earns “usage-based revenues” by helping its enterprise clients to carry out R&D around cell programming at scale. It also seeks to secure additional revenue streams through royalties generated by products and services developed using its platform, or by taking equity stakes in client companies.

Ginkgo said it will use the capital raised through the merger to “dramatically increase the scale” of its tech platform, “accelerating the number of new programs [it is] able to launch” every year.

“These programs have the potential for positive ESG impact as Ginkgo’s customers are using cell programming to address some of the biggest challenges the world is facing today, from climate change to food security to pandemic response,” it added.

The merger is being co-sponsored by Soaring Eagle parent Eagle Equity Partners and Bellco Capital, which is led by gene therapy expert and founder of Allogene Therapeutics and Kite Pharma, Arie Belldegrun. Both firms also invested in the PIPE.

Ginkgo said its senior management team, including Kelly and co-founder and president Reshma Shetty, will remain in place following the merger. They’ll be joined by several new board members, including Belldegrun and former Bayer and Thermo Fisher Scientific CEO, and former Unilever chairman, Marijn Dekkers.

The deal is just the latest in a string of SPAC mergers to take agrifoodtech and related companies public in the US. This week, US crop genetics startup Benson Hill announced it will merge with NYSE-listed Star Peak Corp II at a reported valuation of $2 billion. Kentucky-based indoor ag company AppHarvest combined with Nasdaq-traded Novus Capital in February at a $1 billion-plus valuation; while vertical farmer AeroFarms is completing a $1.2 billion merger with Spring Valley Acquisition Corp. Meanwhile, Southeast Asian ‘super app’ Grab — which claims to be the region’s leading food delivery provider — announced a $40 billion merger with Altimeter Growth Corp in April, in what would be the biggest SPAC deal to date.

Comment? News tip? Story idea? Email me at [email protected] or find me on LinkedIn and Twitter

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