MicroCyto Secures Over RMB 300 Million Series A Funding, Aims to Launch Production Base by Year-End and Files IPO Prospectus

VCBeat has learned that MicroCyto Biotechnology (Beijing) Co., Ltd. (hereinafter referred to as “MicroCyto”) recently announced the completion of its Series A financing round, raising over RMB 300 million. The round was led by Beijing Jingguo Investment Fund, with participation from Beijing Medical and Health Industry Fund, SCGC, and Hebei Industrial Investment. Existing investors, including Beijing State-owned Capital Management Shunxi Fund and Henan Provincial Investment Company, also followed on in this round.

The proceeds from this financing round will be primarily allocated to two purposes. First, to secure production capacity for high-value-added products that have already undergone small-scale industrialization, by transitioning their manufacturing from contract production to in-house operations; to this end, MicroCyto has established a small-scale production base in Qinhuangdao. Second, part of the funds will be used to enhance the engineering scale-up centers that MicroCyto has built in both Beijing and Qinhuangdao.

MicroCyto’s small-scale production base and scale-up engineering center are expected to be completed and put into operation by the end of this year. Amidst the capital winter, MicroCyto has bucked the trend, rapidly achieving a closed loop in product development, manufacturing, and commercialization, thereby earning the trust of investors and global customers.

In fact, it has been less than a year since MicroCyto completed its hundred-million-yuan Pre-A financing round last June and secured tens of millions in additional investment in August. During this relatively short period, MicroCyto has once again achieved significant leaps and development. Particularly in terms of industrialization and commercialization, MicroCyto, as a startup, has rapidly established a closed loop spanning R&D, manufacturing, and market access.It is worth emphasizing that MicroCyto’s self-developed and self-manufactured products have been exported to overseas countries and regions, including Brazil, India, Europe, and the United States.

MicroCyto’s rapid growth amid adverse market conditions stems from its dynamic observation and analysis of the industry.

First, MicroCyto targets existing, real markets with unmet needs, rather than demands such as “anti-cancer” or “health care” described in medical literature that have not yet been accepted by the market. Furthermore, MicroCyto believes that the integration of synthetic biology technologies must bring about significant changes and enhancements to a company’s products in order to establish differentiated competitive advantages. Finally, companies need to leverage diverse strengths through collaboration and complementary expertise within their core teams to rapidly achieve a closed-loop industry chain.

However, the path of rapid development has not been smooth sailing, particularly in overseas expansion. Dr. Liu Bo recalled, “When MicroCyto initially sent samples to foreign clients, no one had heard of our startup. The names that resonated with most were industry giants such as ADM, Cargill, and DSM. In this context, breaking into customers’ supply chains posed a significant challenge.”

“Before formal collaboration, startups can offer products to clients at discounted trial prices. However, pricing is merely a foot in the door and insufficient on its own to win over customers. More importantly, a company’s products must demonstrate stable manufacturing processes and differentiated quality, which require time to validate. Therefore, startup teams expanding overseas need patience to earn respect and recognition.”

Dr. Liu Bo candidly remarked, “While many startups may be ‘darlings’ in China, once they enter the global commercial marketplace, most customers do not place excessive emphasis on their past accolades; instead, they focus more on a company’s core competencies. As a newcomer to commercial competition, MicroCyto must maintain a humble attitude and engage in patient dialogue with clients to gradually gain acceptance and recognition within the industry.”

To date, MicroCyto has gradually earned recognition from customers both domestically and internationally through its humble approach and high cost-performance products. Not long ago, a Brazilian client, after using MicroCyto’s products, specifically flew to China to meet with the company, expressing interest in increasing order volumes and discussing larger-scale collaboration. “Building such strong customer stickiness is not achieved overnight; it requires step-by-step effort.”

Beyond the inherent challenges faced by founding teams in the early stages, the synthetic biology sector as a whole has experienced a roller-coaster trajectory in recent years, with dramatic highs and precipitous lows. Last August, synthetic biology giant Amyris filed for bankruptcy, casting a further pall over an industry already grappling with a sluggish market environment.

Dr. Liu Bo told VCBeat, “In fact, many companies and investors have already drawn a lesson from Amyris’s development: synthetic biology is not an industry, nor is it a new sector. It is merely a foundational technology that must serve existing businesses and industries.”

Although synthetic biology has been hailed as “high-end” in recent years, it is essential to address more “practical” issues alongside industrial development to truly leverage the technology for cost reduction and efficiency improvement across industries. Regarding cost reduction and efficiency enhancement in synthetic biology, Dr. Liu Bo believes, “Saving energy and raw materials is one approach, but more importantly, fundamental issues such as high energy consumption and low yield must be resolved at the technological level.”

In the field of synthetic biology, facility location is closely associated with energy consumption and production yield.In China, industries involving significant energy consumption and fermentation are better suited for establishment in regions such as Northeast China, Shandong, Henan, Hebei, Inner Mongolia, Xinjiang, and Ningxia. These areas offer lower energy prices, ample and affordable raw material supplies, and suitable temperatures. “If you build a plant in Guangdong, the higher energy consumption will directly offset or even undermine the technological advantages of your enterprise. Therefore, while maintaining technological superiority, it is essential to remain competitive with industry peers in terms of site selection, plant construction, and supply chain management.”

With a clear understanding of the above essence, MicroCyto has established engineering scale-up centers in both Beijing and Qinhuangdao, as well as a small-scale production base in Qinhuangdao. These centers and the base are expected to be completed and put into operation by the end of this year.

Taking Qinhuangdao as an example, first, as the first entry point for grain from Northeast China into the pass, Qinhuangdao is home to two major starch factories. Starch happens to be a key raw material for MicroCyto’s production of high-value-added products, giving MicroCyto a supply chain advantage in terms of raw material availability. Second, Qinhuangdao features a warm temperate, semi-humid continental monsoon climate, backed by the Yanshan Mountains to the north and bordering the Bohai Sea to the south, with temperatures well-suited for fermentation and product manufacturing. Furthermore, Qinhuangdao boasts well-developed transportation infrastructure, including port and railway facilities that facilitate cargo transport, and its proximity to Beijing—only 280 kilometers away—enables effective and close collaboration with Beijing’s engineering scale-up center.

From this perspective, for synthetic biology companies to maintain robust growth, three elements are indispensable: favorable timing (current market demand), harmonious collaboration (complementary team strengths), and strategic location (factory site selection).

Leveraging the aforementioned systematic advantages, MicroCyto has established a product portfolio encompassing sugar alcohols and rare sugars such as mannitol and allulose; natural pigments including lutein, zeaxanthin, lycopene, and capsanthin; as well as functional ingredients for animal nutrition, food, and health supplements.

Among the numerous product pipelines, the mannitol pipeline is the most advanced.Mannitol is widely used in pharmaceuticals, food, daily chemicals, and other fields due to its unique physiological functions. Furthermore, owing to its polyol structure, the hydroxyl groups of mannitol can participate in various chemical reactions under certain conditions; thus, it commonly serves as a key intermediate for the synthesis of numerous organic chemicals.

By reconstructing microbial cellular metabolic networks and designing mannitol biosynthetic pathways, MicroCyto has addressed key challenges including substrate uptake efficiency, cofactor regeneration and cycling, and energy pathway driving. Through multi-dimensional and multi-scale optimization of fermentation and purification processes, MicroCyto has become the first company globally to achieve large-scale production of mannitol via biological fermentation.

It is reported that in July 2023, MicroCyto’s mannitol production line achieved mass production and completed sales of hundreds of tons.Product quality has been recognized by numerous international clients, achieving a closed-loop business model encompassing R&D, production, and sales.MicroCyto’s team has continuously optimized its technology based on foundational synthetic biology platforms, achieving a breakthrough with its fifth-generation mannitol technology that further reduces product costs to below RMB 10,000 per ton.

Subsequently, in November 2023, MicroCyto partnered with Sinopharm International to establish Sinopharm Weiyuan Technology (Qinhuangdao) Co., Ltd. in the Beidaihe New Area, a national-level health industry demonstration zone, and rapidly launched its first rare sugar product, allulose. Leveraging its synthetic biology technology platform, MicroCyto exclusively developed a fermentation-based biosynthesis technology for allulose. This innovation enables high-efficiency fermentative production of allulose from glucose or crude sucrose as raw materials, allowing for product crystallization without complex chromatographic separation. This breakthrough addresses key industry pain points, including the high production cost of allulose and the limited downstream application scenarios.

Furthermore, in November 2023, MicroCyto won the championship in the “Foreseeing New Product R&D” track of L'Oréal North Asia’s Big Bang Beauty Tech Creation Camp, jointly seeking greener and lower-carbon solutions. MicroCyto’s participation in L'Oréal’s ESG initiatives stems from L'Oréal’s commitment in its “L'Oréal for the Future” pledge: “By 2030, 100% of bio-based ingredients in our formulas will be traceable and sourced from sustainable origins; by 2030, 95% of all ingredients in our formulas will be bio-based, derived from abundant minerals or circular processes.”

In addition to the disclosed pipeline, MicroCyto has also reserved several blockbuster pipelines centered around daily chemical raw materials, pharmaceutical raw materials, and other areas.As its pipeline advances and production capacity expands, MicroCyto is simultaneously progressing with its next round of financing.