Financing Industrial Biotechnology in the UK

Download the Financing Industrial Biotechnology in the UK report (PDF)

Industrial biotechnology has the potential to transform materials in amazing ways. It creates the opportunity to use alternatives to oil, to reuse waste, and to transform materials with low energy use. Oils secreted by microalgae can be harvested and used as biofuels, while sugar from beet and cane can be transformed into biodegradable plastics for food packaging.

NESTA commissioned this report to look at the state of financing in the UK's Industrial Biotechnology sector and to suggest ways in which early-stage and growth funding might be improved. This report summarises the feedback and key conclusions from a survey of participants in the UK industrial biotechnology sector. The remit of the work was to report and summarise the personal opinions of sector participants rather than to prepare a comprehensive landscape study of IB in the UK. The result should therefore be viewed as a 'collective subjective' view of the sector rather than an exhaustive, independent and objective evaluation. The work was carried out by Technology Greenhouse Limited on behalf of NESTA.

As an industry, industrial biotechnology (biological processes used in industries apart from healthcare) exemplifies the problems that companies who develop novel technology face - those with long and expensive development timelines, and who are dependent on large companies to put their products into action (as customers, acquirers, or by growing themselves). These companies need funding to develop and test the technology they have come up with. They need demonstrations to convince investors and large companies that the technology will work. They need to scale-up processes from the laboratory to the plant, usually in several stages.

The high degree of uncertainty and technical risk for these companies means they struggle for investment in a shrinking early-stage venture capital market. But the effects of this technology can be transformative - there are big prizes to be won for those who can make it work. And the results are not just in profits or cost savings, but in lower energy usage, less landfill and reduced greenhouse gases.

This report represents only a snapshot of the industry. While we believe the approach is representative of the industry as a whole, we would welcome feedback and further comments. The policy recommendations in this report are the first step towards a policy report we hope to publish in the coming months. Please comment, discuss and feed back to us what you think is needed to support this growing sector.

Published:
October 2011

Author:
Technology Greenhouse Ltd