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True Biosciences Overview


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True Biosciences Overview

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True Biosciences Overview

  1. 1. True Science Opportunity
  2. 2. Context The past 60 years have seen incredible gains in the understanding of biology + our ability to turn that knowledge into products that improve lives. Today we have a far better understanding of the building blocks of biosciences and how we can leverage them in different applications areas. This means we’re able to turn basic science discoveries into products for consumer, industrial, and health applications at an ever increasing rate.
  3. 3. Definition This outline is focused on startups developing innovative life science technologies with a multi-disciplinary approach that represent the investment opportunity for True. These companies are often focused on new market creation and building a company with a fundamentally different approach than traditional biotech and don’t fit in a specific box for traditional venture capital firms. We’re entering the deployment age for biotechnology as companies are able to leverage the past 30 years of capital investment + institutional knowledge to bring better products to market faster.
  4. 4. Less Capital, More Risk The cost for experimenting in biotechnology has dropped dramatically over the past decade - enabling Founders to take more risk early. • Shared Equipment + Lab Space • Research intensive companies used to have to either grow out of a university lab or invest capital on their own lab. Places like Berkely Bio Labs or Biocurious (with equipment purchased from eBay) offer a place for scientists to experiment and shared wet lab space at places like QB3 + Lab Central offer inexpensive space and access to tools for new companies • Pay Per Use Services • In addition to being able to leverage the same cost savings that IT startups get with tools like AWS Cloud Services + SaaS applications - Life Science companies have additional services to change early CapEx into OpEx. These include companies like Transcriptic - a cloud laboratory accessible through an API and Science Exchange which allows researchers to outsource their experiments to university and commercial labs that have excess capacity. • Open Source Data • There are an increasing number of freely available open source datasets that allow biotechnology researches to accelerate data collection. Amazon freely hosts human DNA sequence datasets, microbiome DNA sequence datasets, and more. • Leverage from Software + Automation • More and more research that previously necessitated capital-intensive labs can now be done computationally reducing costs and timelines dramatically. OpenTrons offers affordable robots for wetlab automation. Mousera is a next generation CRO which leverages computer vision + sensor technology to track more data about tests.
  5. 5. Markets While the first wave of innovators in life science were mainly focused on using biology to solve problems in healthcare - this new opportunity extends further into additional new, emerging markets: • Food • Memphis Meats, Clara Foods, Mufri, Gelator and others are using synthetic biology to create meat without animals for consumers, while companies like Impossible Meats, Hampton Creek, and New Wave Labs are using plant-proteins to make meat alternatives. • Synthetic Biology • Zymergen, Ginko Bioworks, Manus Bio, Antheia and others are engineering microbes to produce new materials + other products for applications in food, pharmaceuticals, and industrials applications. • Textiles • Bolt Threads is using synthetic biology to create the next generation of high performance fibers. MycoWorks is using mushrooms to build better materials for clothes + storage. Modern Meadow is printing leather. • Other Large Emerging Markets • NeuroTech, Agriculture, Next Generation Diagnostics, Therapeutic Discovery Platforms, Digital Healthcare
  6. 6. Case Study: QB3@953 QB3@953 is a 24,000 square foot facility in the Dogpatch neighborhood in SF. (One of four Spaces QB3 Runs) Startups can rent private labs, individual lab benches, and a variety of office space. Companies can access a wide variety of essential equipment. (Lab Benches start at ~$800 per month) There are currently 53 startups in the QB3@953 lab space (Full) Moleculo, Sano, Whole Biome, and Zymergen all worked in QB3
  7. 7. Pre-Seed Funding The decrease in initial startup costs has created an opportunity for a new segment of investors focused on pre-seed investing: • Break Out Labs • Break Out Labs is a seed stage fund operating out of the Thiel Foundation • The first investments were made in 2012. Focus is getting really early science out of the lab • The current deal is $250k to $500k (as a grant) which converts to 5% if a future financing round occurs • The group has made ~24 investments to date. Rolling admission process via online application • Recently raised follow-on fund for later rounds • YC • Started funding life science companies in 2014 • Current deal is $120k for 7% ownership • 2 Batches per Year; Fund ~100+ Companies Per Batch • Illumina Accelerator • Program launched in 2014; Has funded 13 startups to date • Focus on applications of genomics in healthcare, agriculture, etc • Current deal is $100k for 10% ownership (+ discounts on Illumina sequencing)
  8. 8. Case Study: Indie Bio Indie Bio is a vertical accelerator program focused on bioscience companies within the Accelerator VC - SOS Ventures • The program started in 2012; Runs 2 batches per year • Two on the team had previously started Berkeley Bio Lab • The current “deal” is $250k of initial investment for 10-14% ownership • Offers space to startups for 12 weeks + a structured education program • Has invested in 69 total companies since inception
  9. 9. Case Study: Indie Bio Portfolio Highlights Clara Foods produces ex-vivo egg whites without chickens Koniku is building chips with biological neurons (wet chips) SyntheX is a drug discovery platform focused on peptides Ava creates wine molecule by molecule without grapes or fermentation Jungla is the world’s best predictor for variants of unknown significance in the genome starting with cancers Qidni Labs is building an implantable artificial kidney for 10% of patients with kidney disease, many of which get kidney failure
  10. 10. Case Study: Indie Bio What Indie Bio Does Well: • Tight focus on scientists who want to become Founders • Product offering of education + structured program is very compelling to a first time Founder • Especially for Founders who come from outside the Bay Area • Great brand + focused marketing that drives applications at the top of the funnel • Combination of thought leadership, public talks, and partnerships with different research groups • Examples: Indie Bio class at UCSF; Helping spin up companies with New Harvest • Community ties with the life science broader ecosystem (investors, customers, etc) • Have built relationships through events + meetings • Can get Founders in the room with the people they need to meet early • Business model that works at their scale • High risk, low initial cost on investment • Ability to screen 200+ applications for each batch to get to final 15
  11. 11. Learnings Around Market Constraints: • Significant innovation in biology or chemistry needed as foundation for company • Ideal focus is on helping companies commercialize after validating most of the science • Science takes time + is complicated • Most problems require teams to solve complex problems. Need cross-discipline experience • Many of these markets are regulated + involve multiple stakeholders (ie healthcare, food, industrial chemicals) • Requires more mature Founding team who can navigate issues beyond product • Cheaper to experiment; still requires capital to get to initial validation • Depending on business - but ~$1m for first stage + $6m-$10m for next stage • Combination of larger team, cost of reagents + materials, regulatory / IP work, any trial work • Great technology is no longer enough. Need to answer questions around revenue model + market size early • Ex: For a new diagnostic test: • How much additional value does a patient get for taking this test? (Versus not taking the test) • How can the company capture that value? How long does that process take? Life Science Opportunity
  12. 12. The ideal investments will have: • Great science with large potential impact • Therapeutic applications in healthcare • Other non-healthcare applications with high margin potential • Founder is a leader in the space • Ability to develop cornerstone IP + reputation in the space • Multi disciple teams; cross discipline individual expertise • Path to efficacy (or similar metric) on less than $10m of paid in capital • Opportunity to take risk on market size + product + grey regulatory area • Most firms in market are unable to process these risks • Platform opportunity with large market potential • Ability to build defensible data moat is key • More data makes technology better; increases enterprise value Life Science Opportunity
  13. 13. New company evaluation framework: • How much better is the product from the perspective of the customer? • What is the current outcome? • How does this change the intervention? • How does that affect cost / outcome? • Does the platform get smarter with more time + data? • More data improves targets which leads to more predictable + shorter development cycles • How does it help defend against new entrants? • What is the long-term margin structure of the business? • Goal is high margin product with large number of diverse customers • Component businesses (with input and output pricing pressure) are challenging Life Science Opportunity
  14. 14. • How much capital is required to prove efficacy in humans or at scale? • Important inflection point • Enables large amounts of later stage capital • How large is the addressable market? • Diagnostics tend to be smaller; harder to find downstream capital • How much capital is required to launch the product? • Are there other sources of short-term revenue or non-dilutive capital that can offset cash needs? • Highly regulated therapeutics may be too expensive to fund • How is the product regulated? • What are the potential surprises here? • Who else is in the IP Landscape? • Can the company carve out a defensible position as a market leader? Life Science Opportunity New company evaluation framework:
  15. 15. True Ventures Portfolio Highlights: Stealth NeuroTech