Better spaces for synbio scaling
What's holding back synthetic biology companies in food, ag, climate, and industrial?
At MarsBio we think a lot about physical spaces where innovation happens. Places that are geared towards biotech research are scaling rapidly - in LA we are seeing huge demand for biotech labs, super low vacancy, and companies like Lab Launch pivoting commercial buildings to biotech lab space post pandemic.
But what early synbio companies really need is rapid production and prototyping capabilities - they can find a bench in a lab somewhere but actually producing their products at small or medium scale is hard. First of all the bioproduction and fermentation capacity in the US is very limited. Secondly, drugs and higher value products hoover up all that capacity. Lastly, very few CMOs are geared toward product types in food, ag, industrial - there are just a tiny handful around the US that you can go to as a seed / Series A stage synbio company…. and they keep getting bought by larger synbio companies who then take the capacity for their own production needs.
One model that I would like to see play out is a synbio facility anchored by an in house CMO. Host 5-10 early stage synbio companies. They pay rent for their benches and sub-labs. A fermentation CMO anchors the facility - they have a built in customer base, and the synbio companies have preferential access to small / mid-scale production and process development.
At the moment you would need to operate in a place with a critical mass of synbio companies to make this pencil out, but we are only 2-5 years away from that being dozens of cities in the US. So build your first one in Boston or the Bay Area, work out the model, then scale to San Diego, North Carolina, Seattle.
The investment model here is a fund that makes equity investments in the operator and CMO, and buys the buildings. A CMO wouldn’t typically be a fit for VC investment, but they generate great cash flow and have loads of exit opportunities. If you want to be creative, you can have an allocation for equity investments in select occupant startups too.
The physical spaces where deeptech companies form and scale are super important - new models of management, investment, and operation will be key to driving this industry forward. We’re excited to start testing some of them out.
I like this idea a lot - trying to coordinate with CMOs would be so much easier if they were down the hall. I hope you post about any examples!