Synbio startups attracted over $300 million, accounting for 53% of all VC investment in 2016 (through October 11), and three of the top five deals. Fermentation and catalysis had funding shares of 20% and 16%, respectively.

VCs in 2016 have taken a step back in the value chain to focus on upstream technology platforms like DNA synthesis-as-a-service and automated genomic engineering and lab equipment.

—Victor Oh, Lux Research Analyst

Lux Research analysts built a database of companies and investments in the BBMC space. Among their findings:

• Synbio poised to grow bigger. The top five VC investments—Zymergen, Gingko Bioworks, Twist Bioscience, Elevance Renewable Science and Bolt Threads—reveal an emphasis on automating synbio. These five have raised $430 million in total, and growth of these platforms should lead to even bigger numbers for the segment in 2017.

• Spider silk catches fancy. Spider silk’s superior properties over those of conventional fiber materials like nylon and silkworm silk have prompted big deals, like $82 million for Bolt Threads over the last two years. Japan’s Spiber and Germany’s AMSilk have also pulled in big deals, and up-and-comers like Araknitek and Spiber Technologies may be up next.

• Low oil hits drop-ins, substitutes. Amid low oil prices, VCs have shifted focus this year to commercializing bio-based products that offer improved performance, not just “greener” replacements for petro-based compounds. About 80% of VC investment in 2016 was on improved products, as opposed to only 46% from 2010 to 2015.

The report, titled “Show Me the Money: Where Is Venture Capital Placing Bets in Bio-based?” is part of the Lux Research Bio-based Materials and Chemicals Intelligence service.