“Bioplastics and Biofuels Partnership Opportunities Are Drying up”, says Lux Research Report

A report titled “Top Technologies in Bioplastics and Biofuels” researched the state of the “bio-space”, finding that clear leaders have emerged. The report says that this means opportunities for startups to partner with large companies are dwindling.

Analyst for Lux Research and the report’s lead author, Andrew Soare:

“The market for bioplastics and biofuels has matured since we last compared companies in the Lux Innovation Grid. Clearly defined winners and losers have emerged from what last year had been a pack of largely indistinguishable, under-financed start-ups. Companies that are merely treading water today are falling behind as increasingly dominant players land large funding rounds, forge corporate partnerships or expand their production capacity. It’s critical for large companies to act now because many start-ups in the space are seeking financing and/or partnerships. But few start-ups are likely winners, and securing the wrong partnership with the wrong company could cause corporate players to fall behind their competitors. This report will help corporations know when to answer the phone.”

Many Biotechnology startup companies say that their technology is easy to commercialize; that it will scale up well and that it is economically competitive. This is standard when hunting for investment, but there is no real way of knowing how the startup will perform in the marketplace until it’s there. The effect of competitors, the whole supply chain and unforeseen scaling issues can throw a spanner in the works when making predictions. Some will make it and form successful partnerships with their corporate partners, but many don’t. Lux says the report aims to help investors in their strategy in what it calls a “dwindling pool of likely winners”.
The report looks favorably on fermentation and gasification technologies. TetraVitae and Genomatica are named as interesting companies. The companies with the tag “Synthetic Biology” are attracting a lot of investment with claims of custom-built microbes, Verdezyne and Amyris examples here. The report argues algae companies will probably shrink in number; startups with redundant technology won’t get investment, and will need to share or license technologies, to help build a more integrated value chain. Solazyme and Algenol are cited as leaders, on the grounds of innovative technology and strategic partnerships.