Ginkgo Bioworks (YC S14) is going public today
blog.ycombinator.com
blog.ycombinator.com
Their team has built a platform for biological engineering since day 1.
This is the summary:
* platform for engineering biology (unfair advantage is they've taken this "not a product company" approach since 2009)
* investing up the ecosystem by taking upside in products they engineer for larger companies (not sure if they have an unfair advantage here besides creative financing and momentum, IPO helps with that)
* investing downstream into startups by providing their platform in exchange for equity (YCbio partnership seems like an unfair advantage here)
* mindshare of new minds (iGEM itself is a breeding ground for future synbio employees and leaders who dream of joining Ginkgo, Ginkgo founders co-created iGEM)
Pretty perfect flywheel right there, even if it risks being a spaghetti monster from a corporate structure and cashflow standpoint.
So cool to see this finally coming to light as an IPO. While I don't understand the SPAC benefits, Ginkgo's structure to be able to invest resources into synbio startups in an equity exchange sets them up really well for future cashflow even if the present is not.
(Disclosure Ginkgo bought lab equipment from me in the early days, and I just bought their stock today) https://www.ginkgobioworks.com/2009/09/01/pearl-biotech-open...
Amyris actually has a synthetic biology business. It's less flashy but it's real.
No special access is needed to trade SPACs, just need to follow the news. That being said, I think that most SPACs are pretty bad deals.
SPAC's are incredibly risky. When they IPO they basically are shell companies with no operating revenue. So their valuations are essentially fake (some get better market caps because the people who create them have "track records"). Once a startup converts into them their valuation becomes much more interesting. It's a huge gamble. A SPAC that hasn't converted yet is essentially a guessing game. If the SPAC is valued at $500M pre conversion and the market doesn't think the company is worth $500M then you can lose a lot. The opposite is also true.
Note - its much more complex than this, but this is the general idea.
These guys are MASSIVE in the space. Think Google back in the day.
I predict this will be a hot stock.
Edit: if you're also interested in starting synthetic biology startup please get in touch.
Already starting something in the space, but I’d be happy to talk!
If I may ask, how did you get started? What would your advice be for the motivated amateur? I started in a microbiology degree, transitioned to math, and now I'm about to graduate with my compsci. It's always seemed that there are much deeper connections than was revealed during my courses.
I once told my biology professor that my dream was to innovate in lab technologies. He told me, point-blank, to squash that; the field is oversaturated and we've got as good as we're likely to have for a few decades, so he said.
Do you agree? If not, what do you think are the most glaring market inefficiencies?
For an amateur, I'd recommend 2 things: go to as many conferences as possible (I'm not sure in other fields, but in biotech I think it is important) and get somebody else to pay for you hands on biotech experience.
Don't listen to your biology professor; he's probably part of the problem.
There are a ton of market inefficiencies. Ginkgo, for example, mainly uses metabolic engineer's knowledge to create challenging new products. What if we could automate the job of metabolic engineering? Though in the end case, it all comes down to if you can make money by solving that market inefficiency, which in biotech, is not always true.
You also have to be in the treacherous middle ground of "not doing bullshit" but also "doing shit". Talk to lots of people to figure out where that is. Happy to call if you'd like!
To keep this public dialogue going: are there any biotech conferences you'd specifically recommend? Or are there not any bad choices? I'd also love to get the name of that virology textbook!
Also, to anyone reading this with any interest in biology: I highly recommend that you read this commenter's blog. Here[1] is a link to my favorite post thus far, wherein an actionable plan for a low-cost distribution of material is speculated upon (to put it lightly).
[1] The Sporenet Protocol: https://blog.libredna.org/post/sporenet/
There aren't really many bad conferences, just ones with different focuses (SEED for example is a very good science conference). Go to the one that matches your focus.
Here's the virology textbook - https://www.amazon.com/gp/product/0801663911 It's an oldie, but a good introduction.
Thanks for the good review :) Happy to send you some DNA using the Sporenet Protocol! It actually works, but the main problem is that there aren't materials (yet) to distribute using it. Building a company with a few friends of mine to build those materials.
VC is a long-term business, with the average time from founding to IPO ranging from 8-10 years depending on the year. If you look closer at this list, you'll see companies about to IPO (Amplitude, Relativity Space, Embark Trucks) and several multi-billion dollar exits (e.g Segment <> Twilio, Twitch <> Amazon).
Lastly, the business is all about power law, so these small exits outperform the remaining portfolio by orders of magnitude. I bet they are beyond excited with their returns.
You'd think there would be a prolific Discord or telegram channel publishing interesting public or quasi-public documents?
Does Gingko have a proprietary technology to offer or are they just a centralized platform?
I did notice their latest focus is pharmaceuticals where the huge margins are, but most biotechs will treat manufacturing as a patented process. So with Gingko just take royalties? If so there are plenty of other biotechs (probably many no one has heard of) that do this very successfully.
The business model is still not clear.
https://www.technologyreview.com/2021/08/24/1032308/is-ginkg...
Can anyone shed light on why they would go this route? Is it accurate to say best case is because they wanted less hassle / quicker to market and worst case is that their financials/books are a disaster and they didn’t want anyone looking too closely before the founders raised money and cashed out?
Genuinely curious and would appreciate any insightful replies
Ginkgo has poor results so far, but huge projections, which a fair number of people believe. So, SPAC.
Isn't a standard IPO also great for a tech company with future revenues as long as you believe in your business and future prospect?
Really trying to wrap my head around why a company would do this, and also why this isn't a huge red flag as well
[1] https://news.bloomberglaw.com/bloomberg-law-analysis/analysi...
E.g. Ginko did $100m in rev in 2021 and is at a 20B market cap.
Why would a company do this? Simple: Money. Spac sponsors "guarantee" a ~20B market cap. Investment bankers in a regular IPO might offer $4-5B (still 50x sales).
So what's the difference? Spac sponsors are willing to take "venture" style risk, and traditional IPO underwriters are not.
However the "market" has people that can and will value these companies more than IPO underwriters. Spac sponsors are essentially glorified "venture" style investments, that also happen to take the company public (and take a fairly large cut in return).
An alternative might be to have a "direct listing" without underwriters, however companies are unable to raise funds in a direct listing.
https://www.cnbc.com/2021/09/17/ginkgo-begins-trading-on-the...
Edit: Also just to add on by bringing in that 2 Billion dollars they have essentially secured the future of the company for a long time
https://www.sec.gov/oiea/investor-alerts-and-bulletins/what-...
> If you invest in a SPAC at the IPO stage, you are relying on the management team that formed the SPAC, often referred to as the sponsor(s), as the SPAC looks to acquire or combine with an operating company. That acquisition or combination is known as the initial business combination. A SPAC may identify in its IPO prospectus a specific industry or business that it will target as it seeks to combine with an operating company, but it is not obligated to pursue a target in the identified industry.
Chamath is currently leading four biotech SPACS: DNAA, DNAB, DNAC and DNAD, each with a stated target, neurology, oncology, organs & immunology. Anyone looking to invest in the SPAC today should consider the likelihood of this happening, the potential targets, and the sponsors history.
Or you can wait for an announcement around a proposed merger, even up to the day the official stock starts being traded.
Again, just depends on risk tolerance. It's nice to least have the option to take part in these deals.
It seems like a YC standard-form offer doesn't make any sense to a company like Ginko at the stage it entered YC.