Zymergen's bid to disrupt a $3T industrial manufacturing market goes viral, earning a massive $500M IPO
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It’s not a story you hear every day: A biotech company that doesn’t use its platform to develop therapeutics? Despite some raised eyebrows early on, Emeryville, CA-based Zymergen has convinced investors that its plan to disrupt industrial manufacturing is worth the bet and now it’s priced an eye-popping IPO to take its mission to the next level.
Synthetic biology firm Zymergen late Wednesday priced its 16.13 million shares at $31, good for a public offering in the range of $500 million, which would put the company in rarified air along with Sana Biotechnology as biotech companies with half-billion-dollar or more IPOs this year, according to Endpoints News’ IPO tracker.
The upsized pricing — Zymergen initially penciled in a $100 million cash raise in its S-1 filing last month — puts Zymergen on track to continue developing its designer molecules it plans to use to disrupt a $3 trillion industrial manufacturing market with applications as far and wide as consumer care, agriculture and electronics.
The company plans to get there by using a process it calls “biofacturing,” using genetically engineered molecules to produce industrial-grade products without the need for toxic chemicals often used in the process or expensive infrastructure. All told, the company thinks it can cut costs by about 90% across the industry and produce the same materials in half the time.
It’s a focus that has often not been rewarded among biotech investors looking for a clear path to therapies, but Zymergen believes it’s found its own huge unmet need — and the case keeps on flowing in. The $500 million cash raise comes on the heels of a $400 million Series C back in 2018 and a $300 million raise in September.
All told, the company has raised somewhere in the ballpark of $1.375 billion since its initial seed round way back in 2014.
While the company has broad ambitions for its pipeline, it has just one product on the market: Hyaline, a high-quality optical film used in electronics. Meanwhile, the biotech is pursuing candidates across a trio of electronics, agriculture and consumer care. Those areas alone, it believes, offer a market opportunity of about $1.2 trillion.
Zymergen plans a slate of rollouts in those markets in 2022 and 2023 and will use Hyaline as its canary in the coal mine in terms of consumer interest. If all goes to plan, Zymergen thinks its biofacturing model could prove disruptive across a range of industries, potentially cracking open its lofty $3 trillion market goals.
“Our pipeline of products has been designed with rapid market adoption in mind,” the company said in its prospectus. “In addition, these products demonstrate our biofacturing platform’s ability to develop commercially relevant products across multiple major distinct chemical classes.”