26 February 2023 |

New protein platforms

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Disclaimer: I don’t know much about how synthetic biology ‘works.’ I don’t know much about how precision fermentation does, either. Or how recombinant protein production does.

But as Nan Ransohoff wrote in a recent essay for folks looking to work in climate tech and transition their careers (highly recommend the full piece if that’s where you find yourself): 

Because climate touches most of the global economy, the trick is identifying these areas without having to understand everything about everything.

The same holds for me in covering climate tech. What I can do is identify that synthetic biology is an increasingly important ‘climate tech’ area to pay attention to. 

While new synthetic biology and biomanufacturing techniques aren’t necessarily direct means to reduce emissions or remove legacy emissions from the atmosphere, companies working in these spaces are building new platforms that may significantly impact the physical world. 

The crux of these nascent fields is figuring out new ways to make stuff. The primary lever they use is editing existing genes in organisms or ‘inserting’ new ones into them to upgrade their production capabilities. But whether it’s to make proteins for human consumption that mimic meats or industrial and specialty chemicals, the end goal is to make things in more scalable, cheaper, decentralized, and / or more environmentally friendly ways.

Nor is it just the output of these novel processes that could have climate impact tied to it. Firms working in these areas are highly conscious of the cost of their material inputs. When you have an opportunity to innovate what is ultimately a novel manufacturing technique relatively from scratch, you may as well look for inputs that are more abundant than not.

Let’s take a few examples. This week, three early-stage firms announced new venture rounds:

Precision platforms

I know I started by saying I don’t know much about how these new technologies work, but let’s give it a shot anyway. I trust one of you will correct me where I slip up.

Precision fermentation technology uses microorganisms to produce new compounds. The tech involves modifying the genetic makeup of microorganisms, whether yeast, bacteria, or fungi, to make said new compounds in a scalable way by introducing a new gene into a microorganism’s genome. New genes either introduce new types of chemical production or modify existing genes to increase or alter production. 

Given new genetically engineered microorganisms, precision fermentation then tries to harness and manage their production. If you’ve heard the term ‘bioreactor’ before, that refers to its own class of hardware that aims to create controlled conditions for genetically modified microorganisms to thrive.

A bioreactor for growing microorganisms (via Shutterstock)

Recombinant protein production has a lot in common with precision fermentation. It involves encoding a new gene into a host organism (such as fruit flies in the case of Future Fields) via plasmid or virus. The fruit fly’s ‘recombined’ or reconfigured genome is optimized for protein production.

Neither recombinant protein production nor precision fermentation is brand ‘new;’ similar techniques have already been used to recreate drugs like insulin. 

But interest and investment in these categories have been invigorated in recent years and months by private and public sector tailwinds. Last fall, President Biden issued an executive order to boost biotechnology and biomanufacturing in the U.S., which both crystallized that synthetic biology was on the map and catalyzed it further. 

With respect to the companies that announced their rounds this week, they all locate sustainability as core to their mission. Paleo wants to make animal proteins without the animals, as animal and agriculture-sourced products have incredibly taxing environmental footprints:

Future Fields offers more of a base layer platform, where the proteins they want to produce in fruit flies are inputs for other new production techniques, like making cultured meat.

Similarly, Wild Microbes, at an even earlier stage than the other two firms, focused on identifying promising new microbial strains that could be useful in the biomanufacturing of a myriad of more sustainable products, whether proteins, chemicals, or renewable feedstocks. Still, their initial focus is also on identifying new microbes for protein manufacturing.

The net-net

These are nascent and high-risk tech areas. In a recent podcast conversation with Shanu Mathew (airing in March), we discussed synthetic biology and he noted: 

We’re in the early days of it… there are a lot of technical risks and different market barriers to overcome, but they’re building platforms that others can then build their businesses on. We won’t know about all the applications until the platforms are built.

The platform idea here is essential. Regardless of what firms’ hypotheses are regarding what their new processes might be useful for, if the production processes themselves ‘bear fruit,’ other innovators with different areas of expertise will come in and build on top of them.

Still, we’ve seen overhype in other new manufacturing techniques, like 3D printing, come and go in the past decade. This isn’t to say 3D printing has failed; it’s to say that, like the broader market, there are cycles (often vicious ones) to what’s en vogue with investors. 

From the business perspective, the main question as always is whether the risk is commensurate with the exponential nature of the opportunity. For now, as plant-based meat companies struggle, it’s interesting to track how focus is shifting towards more foundational production techniques that, while useful for making proteins, could offer a lot more beyond making new cuts of meat.

Deals from this week

Medium-sized venture funding rounds

⚡ GeoPura, based out of Wysall, U.K, raised ~$43M for its green hydrogen production business. GM Ventures, Barclays Sustainable Impact Capital, SWEN CP, and Siemens Energy Ventures participated. Read more here. (U.K., Industry)

⚡ Aeroseal, based out of Miamisburg, OH, raised $30M in Series B funding (first close) for its duct and air-sealing products that advance energy efficiency. OGCI Climate Investments led. More here. (U.S., Built Environment)

🌾 GrainChain, based out of McAllen, TX, raised $29M for its agricultural supply chain traceability software. Overstock.com, Pelion Venture Partners, and BYU Cougar Capital participated. More here. (U.S., Food & Agriculture)

🌱 Source.ag, based out of Amsterdam, raised $23M in Series A funding to help build A.I.-powered indoor farms. Astanor Ventures led. More here. (Netherlands, Food & Agriculture)

🔌 Electra Vehicles, based out of Boston, MA, raised $21M in funding for its AI-based battery management software system for EVs. United Ventures led. More here. (U.S., Transportation) 

💦 Aquafortus, based out of Auckland, New Zealand, raised $17M in Series A1 funding to purify high-salinity brines while recovering valuable metals and minerals. DCVC and Novo Holdings led the round. More here. (New Zealand, Industry)

🌿 Loliware, based out of San Francisco, raised $15.4M in pre-Series A funding for its sustainable seaweed-based packaging. L Catterton and Alumni Ventures Group participated. More here. (U.S., Industry)

🏢 Gridium, based out of San Francisco, raised $14M for its decarbonization software company for commercial real estate. Navitas Capital led. Gridium also received access to a $10M revolving debt facility from Mitsubishi HC Capital. More here. (U.S., Built Environment)

🥩 Paleo, based out of Brussels, Belgium, raised ~$12.7M in Series A funding for its precision fermentation technology for proteins. DSM Venturing and Planet A Ventures led. More here. (Belgium, Food & Agriculture)

🪰 Future Fields, based out of Edmonton, Canada, raised $11.2M in extended seed funding to use fruit flies for recombinant protein production. Bee Partners led. More here. (Canada, Food & Agriculture)

🔋 XL Batteries, based out of Norwalk, CT, raised $10M in Seed-2 funding for its grid-scale battery storage technology. Catalus Capital led. More here.

Smaller venture funding rounds

🤖 Swap Robotics, based out of Ontario, Canada, raised $7M in seed funding for its electric snow-plowing and vegetation-cutting robots. SOSV led. More here. (Canada, Industry)

💱 Oka, based out of Park City, UT, raised $7M in seed funding to provide insurance for carbon market companies. Aquiline Technology Growth led. More here. (U.S., Carbon Markets)

🚗 Hypercraft, based out of Provo, UT, raised $6.5M in seed funding to develop electric drive systems. RevRoad Capital led. Read more here. (U.S., Transportation)

💱 Kita, based out of Worcester, U.K., raised ~$4.8M in seed funding for its carbon markets insurance platform. Octopus Ventures led the round. More here. (U.K., Carbon Markets)

🍇 Carbon Maps, based out of Paris, France, raised ~$4.2M in seed funding for its SaaS platform for the food industry to track its environmental impact. Breega and Samaipata participated. More here. (France, Industry)

🦠 Wild Microbes, based out of Cambridge, MA, raised $3.3M in pre-seed funding for its precision fermentation startup. Climate Capital led. More here. (U.S., Food & Agriculture)

📊 Topolytics, based out of Edinburgh, Scotland, raised ~$1.8M in combined grant funding from UK Research and Innovation and angel funding for its corporate waste management software. More here. (Scotland, Industry)

⬇️ Aqualung Carbon Capture, based out of Oslo and Milwaukee, raised an undisclosed amount of money from Denbury, a Texas-based oil and gas company, for its membrane CO2 capture tech. More here. (U.S., Industry)

❌ EcoSpears, based out of Altamonte Springs, FL, raised an undisclosed amount of money from VenVelo and Stirling Operations to scale its PFAS destruction technologies. More here. (U.S., Industry)

🔌 eDRV, based out of San Francisco, raised an undisclosed amount of seed funding for its EV charging-management software. Automotive Ventures led. More here. (U.S., Transportation)

♻️ P2 Science, based out of Woodbridge, CT, raised an undisclosed amount of funding to convert renewable feedstocks into specialty chemicals. Lewis & Clark AgriFood, Heritage Group Ventures, and others participated. More here. (U.S., Industry)

Private equity and other funding rounds 

🔌 EO Charging, based out of Stowmarket, U.K., raised ~$80M in funding from Vortex Energy and Zouk Capital for its EV fleet charging business. More here. (U.K., Transportation)

⚡ Missed this one earlier this month: Goldman Sachs launched and will invest up to $1B (across equity and debt) in Verdalia Bioenergy, a new company focused on scaling renewable biomethane plants across Europe. More here. (Europe, Energy)

⚡  The Alberta Hydrogen Centre of Excellence, based out of Edmonton, Canada, awarded $20M in grant funding to 18 pilot projects focused on innovation in hydrogen. Read more here. (Canada, Industry)

New funds 

💰 Sasol, a chemicals manufacturer based out of Johannesburg, South Africa, launched Sasol Ventures with €50M to invest in decarbonization efforts. It plans to allocate the fund within five years in partnership with Emerald Technology Ventures. More here. (South Africa, Funds)

💰  Contrarian Ventures, based out of Vilnius, Lithuania, raised €25M from the European Investment Fund. The fund is targeting up to a €100M raise for its second fund to invest in climate tech companies. (Lithuania, Funds)

Other headlines

⚡ Tech deployment: New York approved $4.4B for transmission upgrades to unlock up to 3.5 GW of new renewable energy capacity. Transmission and storage are the two most important levers for renewable energy deployment right now. 

⚡ More tech deployment: Tapping IRA benefits, Constellation will invest $800M in two existing nuclear power facilities in Illinois to expand their capacity by up to 135 MW.

⬇️ More tech deployment: Fervo Energy, a geothermal developer, announced it will build a U.S.-based direct air capture facility powered by geothermal with support from the Chan Zuckerberg Initiative. 

🌲 And more tech deployment: Living Carbon planted its first trees in the wild last week! Their poplars are engineered to take up extra CO2 during photosynthesis. Ideally, they’ll be a turbocharged carbon removal engine without disrupting the rest of the ecosystem.

📈 Another week, another IPO: Greenworks, a manufacturer of battery-powered outdoor equipment, raised ~$533M in its IPO on the Shenzhen stock exchange this week. 

🔋 Product release: Our Next Energy unveils its new stationary lithium iron phosphate battery system, offering four-hour energy storage to pair with renewable energy.

🤝 Carbon markets: A slew of leading carbon removal companies formed a new Carbon Removal Alliance this week to advance policy and innovation to grow the industry. Elsewhere, Planetary Technologies ‘donated’ their MRV process for the global ocean CDR community under a creative commons license. 

⚡ Powering up virtually: More utilities (and companies) are rolling out their first attempts at virtual power plants, i.e., networks of distributed energy resources across households and buildings.

🌬️ Winds of change: The Department of the Interior is exploring the first-ever offshore wind lease sale in the Gulf of Mexico. 

🚫 so good news: Despite torrential rains and serious snowfall this year, California is missing an opportunity to store water and prevent drought conditions. Some blame policy, but one thing that’s definitely missing is the necessary infrastructure to store more water.

🌞 Closing on good news: One of the UAE’s newest reactors began commercial operation this week, adding 1.4 GWs of clean electricity capacity to the oil-rich nation’s grid.