Bio-based chemicals and materials are catalyzing the biggest change that the global chemicals industry has seen in decades. Surprisingly for an industry so dependent on massive scale, small technology startups are leading the way. We evaluated the technical and business strengths and weaknesses of 106 new innovators, charting their evolution towards a successful exit or early extinction. They compete in seven technology areas, from renewable feedstocks like algae, GM crops, and waste gases, to downstream processing in pyrolysis, gasification, and synthetic biology. In addition to each player's position, each field's evolution feels external forces like value gaps in the marketplace, government policy, investor interest, and macroeconomics.
Executive Summary
Small technology startups are bringing new technologies for creating new bio-based chemicals and materials, and their growth is forcing corporations in the field to take notice. To make heads and tails of this year's crop of innovators included in Lux's Bio-based Materials and Chemicals coverage, we evaluated 106 firms separated into seven categories, each segment tackling similar technical challenges:
• While a few algae players may break free, the field as a whole will remain dismal. Despite billions in research in algae, technical and economic challenges have stymied large-scale cultivation, and the Lux Innovation Grid ranking these companies is dismal: most algae players like Bionavitas, SunEco Energy, Algae Systems, and Bioalgene have severe flaws that land them in the Long-shot category. Where there is BBMC success, we see it in collaborations with Dow, DuPont, and UOP; it's a safe bet that co-products like pet food are all that companies such as SunEco Energy or Bioalgene will ever profitably produce.
• Biocomposites bristle with activity from both mature players and recent entrants. Biocomposites like polylactic acid and starch-based materials are the original bioplastics. Leaving aside corporate giants like NatureWorks, Novamont dominates the field in both technology and capacity; other top players include Northern Technologies, Taghleef, and PHA developer DaniMer. Firms like EcoSynthetix, Crey Bioresins, and Soy Works are technically innovative, but struggle to commercialize.
• Mature integrated bioprocessing firms scale, even as new entrants crowd in. Bioprocessing is a large, broad-ranging, and well developed field reflecting giant strides in genetic engineering. Fourteen companies occupy the Dominant category, including BioAmber, Myriant, Genomatica, Gevo, LanzaTech, and Cathay. As leaders like Verdezyne scale up manufacturing capacity of useful compounds like adipic acid, money will continue to flow in and fuel IPOs and M&A (like Amyris's purchase of Draths).
• Cellulosic processing technology developers tackle one of nature's toughest polymers. Unlike the sugars readily available from food crops like corn and cane, sugars from cellulosic material require a greater effort to release. The 12 companies we profile in this space approach that effort with very different techniques, and a range of results: Lignol Innovations and HCL CleanTech use enzymatic and acid hydrolysis respectively, and have landed partnerships with Novozymes and Virent; other strong players include Aemtis and ZeaChem. Blue Marble, Terranol, and Deinove bring up the back of the cellulosic pretreatment pack.
• Crop modification companies thrive with close corporate collaboration. The nine companies we cover in crop modification are tinkering with biomass genetics for renewable chemicals–and food crops too. But even dominant startups like Arcadia, Agrivida, and Mendel need major players like Monsanto and Bayer CropScience to shepherd them through lengthy and expensive field trials. PlantPharm Biomed, and Agradis show high technical value while Cibus and SweTree do so in business. The success of the field ultimately must address public acceptance of the spectrum of GM techniques.
• Idealistic but ineffective companies clutter the waste gases to chemicals field. Technologies that not only sequester carbon, but convert it into something useful promise the alchemist's dream of turning junk into wealth. However, in this scattered and feeble field only LanzaTech and Novomer land in the Dominant square, with partners like DSM, Praxair, and Albemarle Ð and competitors like Bayer and Sumitomo Chemical. Oakbio and CO2 Solution have some strengths, but the Long-shot category is large.
• Thermochemical processes promise the bounty of bioprocessing, without finicky bugs. In contrast to bioprocessing, thermochemical technologies create compounds via more scalable catalytic and conventional chemical methods. The Dominant quadrant's five innovators make the field one of the strongest in the BBMC space. Among them we find Virent, Ensyn, Avantium, Segetis, and Elevance, which uses metathesis to convert plant oils into glycerin, esters, and biofuels. Siluria and SynTerra have technical or business strength, while Rennovia, Rivertop, Gas Technologies, SynGest, and Aither round out the Long-shots.
Editor's Note:
The text presented here is a reprint of the Executive Summary of a report prepared by Lux Research, Inc. (December 2011; www.luxresearchinc.com). Lux Research does and seeks to do business with companies covered in its research reports. As such, the firm may have a conflict of interest that could affect the objectivity of this report. Lux Research prepared this report solely for informational purposes. The information and views expressed here are those of Lux Research, Inc., and not Industrial Biotechnology or Mary Ann Liebert, Inc.
