Industrial Biotech

                    FESTEL CAPITAL

Market Potentials and Corporate Strategies in Industrial Biotechnology

Background

Industrial Biotech is an emerging field within modern biotechnology that uses living cells like moulds, yeasts or bacteria as well as enzymes.

Nowadays, a large number of products are already being manufactured using biotech processes (e.g. bulk chemicals, enzymes and vitamins).

The impact of industrial biotech is strong and can be recognized on different levels (e.g. quality improvements) through better products, growth through innovative products, cost-effectiveness through new processes).

Start-ups in the field of industrial biotech are expected to contribute to the growth of the influence of industrial biotech on the chemical and lifescience industry significantly.

Core Messages

  • White Biotech is of enormous importance for the competitiveness of European chemical and lifescience industry.
  • Possibilities to replace existing chemical production processes with biotechnological processes will increase due to advances in biotechnological R&D.
  • The production costs are a decisive driving force for the change towards biotechnological production processes.
  • Fermentation and enzyme catalysis are the most interesting biotechnological production processes.
  • Start-ups in industrial biotech are more conservatively financed than start-ups in red biotech (nearly all of the start-ups in red biotech are financed by VC compared to only 15% to 20% in industrial biotech).
  • Most of the industrial biotech start-ups use primarily their operational income for financing current operations and growth.
  • The investment volumes are lower, the development periods for new products are shorter and there are no admission procedures for the product.
  • Consequently, the products can be commercialised more rapidly and operational income contributes to the financing much earlier and the start-up needs lower pre-financing.
  • The growth potential of service-oriented companies is limited to a certain extent; in order to realize further growth, the development of  own IP is necessary. The aim should be to develop a prospering start-up scene in industrial biotech as can be seen in red biotech.
  • M&A might increase in importance since most start-ups only possess low financial strength which might lead to consolidation.
  • New technologies developed in academic institutions, do not always find the way into the industry, because academics are not involved in process development.
  • The further development of industrial biotech in Europe depends on the ability to establish a prospering start-up scene in Europe.
  • Long-term oriented financial support during the seed and growth phase is the key success factor to develop a prospering industrial biotech start-up scene in Europe.

                    Disclaimer               Privacy Policy                   Terms of Use                   Site Map                   Imprint             

 © FESTEL CAPITAL