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Volume 7, Issue 3
Published: April 29, 2013
Investing in renewable chemistry startups

In a capital-intensive industry such as industrial biotech, start-ups cannot only gain access to technology and know-how, but also secure significant investments through developing partnerships

 

The chemical industry today has perfected its processes, supply chains and distribution networks based on petroleum as its primary feedstock. The innovations are few and far between; they are based on incremental improvements and continue to require large capital expenditures to keep the economics affordable. The geopolitics, volatility of petroleum prices, increased difficulty in accessing petroleum reserves, global demographics and pressure to increase margins have all forced the industry to look for ways to innovate outside of its traditional sandbox and to diversify its feedstock outside of the traditional petro-chemistry.

Parallel to these industry trends, the last decades have witnessed an enormous progress in the development of biotechnology and have rendered the ability to engineer different microorganisms almost limitless. Initially those technologies, which had been primarily focused on the development of therapeutic molecules, started to venture into areas such as enzyme engineering, chemicals production and energy, among others.

While imagination may be unlimited, the traditional industry continues to encounter questions and challenges around scale-up, economics and development of the value chain and further, downstream, the setup of appropriate business models and partnerships that lead to success. Altogether this represents the dawn of a new industry where many details remain to be invented: the so called ‘renewable chemistry industry’.

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