5 Jul 2021

Thank you, Biology, and so long, petrochemicals: Atomico’s investment in FabricNano

If I weren’t a computer scientist I might have been a chemical engineer. One of the classes that I was most compelled by at high school was chemistry — in particular, organic chemistry. What fascinated me in particular was how beautiful geometric arrangements of just a few elements — Carbon, Oxygen, Hydrogen and Nitrogen — could produce substances with hugely different properties (including life itself). What stood out further is that a huge bounty of everyday organic compounds was produced mainly from oil, a condensed form of long-ago living matter. Oil-based chemical production starts with breaking down the oil (a process called “cracking”) and, broadly speaking, then recombining them in inventive ways. The resulting products are everywhere around us — plastics, paints, cosmetics, deodorants, medicines — even toothpaste.

Not long afterwards, I found out just how energy-inefficient, environmentally damaging and, by definition, unsustainable the petrochemical supply chain often is, but we didn’t have much of a choice. Oil is the irreplaceable resource behind a vast number of the conveniences of modern life.

The VC firm where I work, Atomico, has long argued that profit and (positive) purpose can be mutually reinforcing rather than necessarily at odds. Nowhere is this clearer than some of the startups Atomico has backed that attempt to solve planet-scale environmental challenges. This blog post is to tell you about one such company.

First, it should go without saying that humanity needs to find alternatives to petrochemicals. These account for 14% of global oil demand, a share which has been inexorably growing, and is expected to reach 50% by 2050. Countries quite simply cannot hit their commitments to the Paris Agreement to reduce Greenhouse gases without tackling this elephant in the room.

Enter biology. Life has evolved over millennia to do things that are simply unmatched by our crude chemistry based approaches. Early humans discovered this in the process of fermentation: producing alcohol from sugars via a wonderful organism called yeast. Recently, a new generation of biotech companies have harnessed this approach to great effect to produce high value molecules using biology. This is inventive and ingenious but unfortunately only applicable to relatively expensive output molecules. Great for pharmaceuticals, but economically unviable for producing mass products, such as plastic, constituting the majority of oil-derived chemicals.

While lauding these fermentation-based startups, many of which will continue to play important roles in high-value chemical production, we have been keeping an eye out for startups targetting the broader problem of low-cost, high volume chemical production.

Biology again to the rescue. What we need is an approach that breaks down the magic that happens within a cell into more elementary processes, and utilizes these at scale. The result would be a much more efficient process than fermentation, needing lower energy use, fewer input chemicals and producing much less waste. This effort, now called “cell-free biology” has remained elusive, owing primarily to the high cost of enzymes and supporting building blocks (“cofactors”) needed.

Excitingly, there’s at least one company that could just crack this challenge, using an ingenious way of holding on tightly to enzymes and cofactors using DNA, making them reusable and therefore the process much more cost effective than approaches that use glass beads and other physical binding methods (the previous state-of-the-art).

Founded by Grant Aarons and Ferdy Randisi, London-based FabricNano has an ambition level no smaller than to become the world’s next chemical giant, though, unlike the incumbents, a chemical company the world could actually love given their sustainable, responsible approach. They have convened an impressive interdisciplinary team by drawing from experts across biochemistry, chemistry, enzymology, computer science and theoretical physics, and have already proven that their core technology works.

That’s why I’m proud that we at Atomico just made public our partnership with the FabricNano team by leading their series A, joined by a bevy of amazing angel investors across the chemical industry, sustainability investors and technologists from Silicon Valley to Europe. This funding will enable them to accelerate the scale-up of their FabricFlow reactor technology, starting with sustainably synthesising chemicals used in plastics and personal care products.

A pipeline of about 400 [biology produced] use cases … is already visible. These applications alone could have direct economic impact of up to $4 trillion a year over the next ten to 20 years — McKinsey 2020 report

Grant and Ferdy, thanks for choosing Atomico to join the FabricNano journey, and I’m personally very much looking forward to the day that the oil based chemical processes I learnt about decades ago become more a matter for the History rather than Chemistry books!

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