Scaling up biomanufacturing processes is a crucial step towards building a sustainable, healthier, and resilient economy. The bioeconomy relies on the production of food, materials, and other products by microorganisms. The report “To make the Bioeconomy real, develop for scalability and creditworthiness” highlights the importance of financing the infrastructure required for scaled-up biomanufacturing, and the sources of capital that could be utilized. The report also recommends coordinating researchers, founders, governments, investors, and lenders to scale up the bioeconomy successfully. By sketching out the financing journey early on and building businesses with creditworthiness in mind, the report suggests that access to lower cost of capital could be unlocked. Blue Horizon, a global pioneer of the Future of Food, has raised over USD 850 million to invest in more than 60 companies and transform the global food industry.
Achieving Scalability and Creditworthiness for Successful Bioeconomy Implementation
Biomanufacturing, also known as biobased production, is a crucial element in creating a sustainable, healthier, and more resilient economy – also referred to as the bioeconomy. This process involves the use of microorganisms to produce food, materials, and other products. While some biomanufacturing processes, such as insulin production, are well-established in the pharmaceutical industry, others remain in the pilot stage, producing food ingredients like egg protein and natural colors, vegan leather, and sustainable cement.
To fully realize the potential of the bioeconomy, the key step is scaling up biomanufacturing processes for food and materials to industrial volume and cost levels. According to a report published by Swiss impact investor Blue Horizon and Italian CDMO Olon, titled “To make the Bioeconomy real, develop for scalability and creditworthiness,” founders, investors, researchers, and legislators in the bioeconomy industry should take three courses of action to scale up biomanufacturing.
Go-to-Market Strategy and Bioprocess Development
The first approach entails considering the go-to-market strategy and how it affects the selling price of the product, and consequently, the maximum acceptable manufacturing cost of the biomanufacturing process. For any business plan in the bioeconomy, iteration between the go-to-market strategy and bioprocess development is crucial. Although higher manufacturing costs may be acceptable in immature markets with low demand elasticity and a lack of cheaper alternatives, firms with chronically high manufacturing costs will struggle to remain competitive in mature markets, chasing elusive premia.
Multi-Parameter Optimization Challenge
The second course of action requires optimizing strain selection and process development. Choosing between the three most commonly used types of microorganisms, selecting media ingredients, and deciding whether to scale up or out all contribute to the scalability of the process. Therefore, it is important to develop the biomanufacturing process with scalability in mind to increase the chances of success.
Infographic courtesy Blue Horizon
Creditworthiness
Finally, creditworthiness is critical in obtaining funding for scaling up biomanufacturing processes. Given the long development timelines and regulatory barriers in the bioeconomy, funding mechanisms such as milestone-based payments and revenue-sharing arrangements should be considered.
In conclusion, scaling up biomanufacturing processes for food and materials is vital in building a successful bioeconomy. By considering the go-to-market strategy, optimizing strain selection and process development, and enhancing creditworthiness, founders, investors, researchers, and legislators can ensure the bioeconomy’s success.
Financing the Infrastructure of Scaled-up Biomanufacturing for a Successful Bioeconomy
For the bioeconomy to flourish, biomanufacturing processes need to be scaled up to industrial levels. However, scaling up biomanufacturing processes poses a significant challenge, as it requires scaled-up infrastructure to run on. Financing such innovative infrastructure is crucial and involves a range of possible sources of capital, such as shareholders’ equity, public subsidies and grants, and various forms of debt. To build businesses with creditworthiness in mind, it is essential to sketch out the financing journey early on and unlock access to a lower cost of capital.
Recommendations for Coordinating the Different Factions
The full report on bioeconomy, titled “To make the Bioeconomy real, develop for scalability and creditworthiness,” covers all three aspects of bioeconomy in detail and provides additional thoughts and examples. It also outlines clear recommendations for the five different factions involved in scaling up the bioeconomy: researchers, founders, governments, investors, and lenders. Each faction’s recommendations are summarized briefly to coordinate and scale up the bioeconomy successfully.
Conclusion
The authors of the report believe that by coordinating these five different factions to scale up the bioeconomy, there is enormous potential for financial opportunity and a positive impact on the planet, humans, and animals.
About Blue Horizon
Blue Horizon is a global pioneer of the future of food and is accelerating the transition to a new sustainable food system that delivers outstanding returns for investors and the planet. As a pure-play impact investor, Blue Horizon invests at the intersection of biology, agriculture, and technology, with the aim to transform the global food industry. The company was founded by Roger Lienhard in 2016 and is based in Zurich, having raised over USD 850 million and invested in more than 60 companies. Its business model offers an attractive opportunity to invest in the evolution of the global food system while contributing to a healthy and sustainable world.
The report provides valuable insights into scaling up biomanufacturing processes for a sustainable and resilient bioeconomy. By coordinating the different factions involved and sketching out the financing journey early on, businesses can be built with creditworthiness in mind, unlocking access to a lower cost of capital.
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