Synthetic Biology Investors Are Scouting for Projects in County-Level Cities

“We have recently invested in several synthetic biology projects in county-level cities,” an investor told VCBeat. “We are still evaluating the sector; if we continue to delve deeper along this line of thought, we should be able to identify more high-potential ventures.” The investor expressed keen interest in synthetic biology initiatives based in county-level cities. Having tracked the synthetic biology track for a considerable period, engaged in various industries, and reviewed numerous projects, he felt as though he had discovered a new frontier.

In recent years, as an increasing number of synthetic biology projects have completed early-stage validation, the exceedingly low commercialization success rate has become a major concern for founders and investors alike. The underlying reason is that few synthetic biology startups can effectively master two critical aspects: stable large-scale manufacturing processes and mature end-product application markets. Nevertheless, synthetic biology ventures cannot ultimately bypass commercialization to focus solely on technology.

Synthetic Biology Projects in County-Level Cities: The Logic Is SimpleThe core of such projects is typically a traditional industrial raw material manufacturer that, at a critical juncture for upgrading, adopts synthetic biology technologies to reduce costs and enhance efficiency. In doing so, it passively completes the entire value chain of synthetic biology—from gene editing to application development—and unexpectedly delivers a high-performing case study in the commercialization of synthetic biology.

Of course, county-level cities are by no means a utopia for synthetic biology investment. “It is difficult to source quality projects, and deploying capital is equally challenging,” said the aforementioned investor. Although the projects themselves hold considerable potential, county-based founding teams and external investors still struggle to reach consensus on future strategic issues, such as product selection and capacity expansion.

In many critical aspects, synthetic biology bears a striking resemblance to biofermentation processes. Essentially, both leverage the metabolic functions of microorganisms to convert raw materials such as sugars, starch, cellulose, and carbon dioxide into target products. The key distinction lies in the fact that, unlike biofermentation, which relies on trial and error to develop and optimize process workflows, synthetic biology enables quantitative and controllable production of desired compounds.

Underpinning this is the fundamental logic that synthetic biology emphasizes the use of genetic engineering techniques to precisely regulate strain modification processes and biosynthetic pathways. In this process, cutting-edge biotechnologies such as DNA sequencing, gene editing, and DNA synthesis provide key tools for precise regulation in synthetic biology.

After nearly half a century of development and accumulation, humanity has acquired considerable capability to understand, and even regulate, the material world at the molecular level.

First, DNA sequencing technology has undergone three rounds of iteration and entered a stable application cycle. DNA sequencing is the foundation of synthetic biology and a critical link in quality control. Large-scale genome sequencing can provide information at the molecular level of natural organisms. Based on these data, researchers can construct biological parts and devices. In addition, through DNA sequencing, researchers can verify whether the manufactured systems meet expectations.

Since the advent of the original Sanger sequencing technology, DNA sequencing has undergone rapid development, establishing a comprehensive technological framework comprising first-generation Sanger sequencing, second-generation sequencing-by-synthesis, third-generation single-molecule fluorescence sequencing, and fourth-generation nanopore sequencing. This framework meets the differentiated requirements for read length, throughput, speed, and accuracy across various application scenarios. Meanwhile, the cost of DNA sequencing has decreased substantially. Data show that since 2001, the cost of DNA sequencing has dropped from nearly $100 million per genome to $0.006 per genome.

Next came the emergence and continuous optimization of high-efficiency gene editing. Gene editing is a critical step in integrating genetic elements with specific functions into the microenvironment used for expressing the final product. Gene editing relies on genetically engineered nucleases, also known as “molecular scissors,” to generate site-specific double-strand breaks (DSBs) at targeted locations in the genome. This induces the organism to repair the DSBs through non-homologous end joining (NHEJ) or homologous recombination (HR). By artificially directing or interfering with this repair process, specific DNA sequences can be deleted or exogenous genes can be inserted.

Over the past three decades, gene editing technologies have undergone continuous iteration. In 1996, the first generation of gene editing technology was designed—zinc finger nucleases (ZFNs) engineered through genetic modification—marking the beginning of the journey to artificially modify living organisms. In 2009, the second generation of gene editing technology emerged: transcription activator-like effector nucleases (TALENs). However, both generations suffered from long construction cycles and cumbersome procedures, making high-throughput gene editing difficult and significantly limiting their widespread application. By 2012, CRISPR/Cas9 gene editing technology appeared. Compared with ZFNs and TALENs, CRISPR/Cas9 is much simpler to design, accessible to any molecular biology laboratory, and more cost-effective. Furthermore, for the same targets, CRISPR/Cas9 demonstrates comparable or even superior targeting efficiency.

Finally, there has been a significant improvement in the quality and efficiency of DNA synthesis. Currently, industrial-scale DNA synthesis processes typically begin with the chemical synthesis of oligonucleotides; longer DNA molecules are then assembled stepwise from these oligonucleotide building blocks through enzymatic reactions. In the 1980s, phosphoramidite-based DNA synthesis was developed. Although the single-step coupling efficiency for oligonucleotide synthesis has reached as high as 99.5%, the overall yield drops to approximately 35% when the synthesis length reaches 200 bp, making it difficult to purify the target fragments and precluding the synthesis of kilobase (kb)-length oligonucleotides.

With the advent of microarray-based DNA synthesis technology, the required reaction concentrations for synthesis have been reduced, while ensuring both cost-effectiveness and synthetic accuracy. In 2021, the average cost per megabase (Mb) of synthesized bases dropped to $0.006, down from over $5,000 two decades earlier. In the future, with the development and maturation of fourth-generation enzymatic synthesis technologies, DNA synthesis is expected to further reduce costs and achieve larger-scale production.

At present, numerous synthetic biology companies both in China and abroad have leveraged the aforementioned foundational technologies to build robust capabilities for targeted strain engineering, achieving synthetic biological “creation” at the laboratory scale. For instance, Ginkgo Bioworks utilizes synthetic biology techniques to produce enzyme raw materials required for Moderna’s COVID-19 mRNA vaccines; Genomatica has successfully commercialized its bio-based BDO, 1,3-butanediol, and nylon products; Demetrix is dedicated to producing cannabinoids using fermentation technology; and Amyris has established the world’s largest automated strain engineering platform.

In a sense, the maturation of gene engineering-related technologies has propelled the global application of synthetic biology into its second phase at an accelerated pace.

In the new phase, achieving industrial-scale production has become the core mission of synthetic biology. Among the various challenges, scaling up production is the most critical and exceptionally difficult step. However, overcoming the technical hurdles associated with industrialization is not the forte of mainstream synthetic biology startup teams.

As previously mentioned, the scale-up process for synthetic biology products is fundamentally identical to that of biological fermentation, relying primarily on fermenters. However, scaling up production is not simply a matter of continuously increasing fermenter size, as fermentation efficiency often declines with larger scales. For synthetic biology, the core challenge in achieving scalable manufacturing lies in overcoming two major technical bottlenecks: strain engineering efficiency and process scale-up effectiveness. If chemical companies with stable production capacities take over the industrialization phase, this could offer new approaches to resolving the commercialization challenges facing synthetic biology.

On one hand, the outcome of strain engineering determines, to a certain extent, the product conversion rate, production rate, and yield. The first step in synthetic biological manufacturing is to select a high-performance strain, known as a chassis cell, to serve as the host for product production, based on the characteristics of the target product. For early-stage synthetic biology companies, identifying and characterizing suitable chassis cells was already time-consuming and labor-intensive. Only on this basis can specific target genes in the organism’s genome be engineered and modified to achieve the goal of rewiring microbial metabolic pathways. These two steps test the multidisciplinary capabilities of synthetic biology companies in areas such as biology and genetic engineering.

Furthermore, increasing production rates depends on the efficiency of enzyme-catalyzed reactions within the synthetic pathway, which presents another challenge in practical manufacturing. Biosynthetic pathways for chemicals typically consist of a series of enzyme-catalyzed reactions. Under natural conditions, it is difficult to achieve coordinated catalytic efficiencies among the various enzymes. In synthetic biology workflows, achieving balanced and coordinated interactions between enzymes is also challenging; effective optimization of synthetic pathways usually requires the integrated application of multiple strategies, including multi-gene regulatory technologies, dynamic gene regulation technologies, and protein scaffold technologies.

On the other hand, high-efficiency, low-cost separation and purification processes play a crucial role in product efficacy, which is also a capability gap for most early-stage synthetic biology companies.

Research and development of high-efficiency, low-cost separation and purification technologies is a critical step toward achieving industrial-scale production. In synthetic biology manufacturing, separation and purification—the process of obtaining high-quality products from complex biological fermentation systems—represents both a key step and a significant technical bottleneck for large-scale industrialization. Unlike traditional chemical separation, the isolation of biological products must preserve their bioactivity, often requiring low temperatures, appropriate pH levels, and controlled pressure conditions, thereby imposing stringent demands on separation and purification techniques. Furthermore, data indicate that downstream product separation and purification processes are costly, accounting for more than 60% of total production costs. For certain high-value-added products, this proportion can reach as high as 90%.

At this stage, although global investment and financing data indicate that early-stage capital in the primary market is more inclined to flow toward synthetic biology companies focused on specific product development, there are very few synthetic biology innovators that truly possess comprehensive industrialization capabilities.

In a sense, within the long and complex R&D cycle spanning from strain construction to scaled-up production, while the initial phase relies on technological innovation to break through unknowns, the subsequent commercialization phase demands the long-term accumulation of product capabilities. This has enabled traditional chemical enterprises with strong product and channel capabilities to step onto the historical stage of synthetic biology.

At present, under multiple pressures from costs, production capacity, and environmental protection, an increasing number of traditional industries are proactively embracing synthetic biology. Research indicates that synthetic biology has been widely applied in fields such as chemicals, pharmaceuticals, food, and agriculture. Among these, its application in the chemical industry is the most mature.

According to McKinsey’s forecasts, synthetic biology is expected to have a direct economic impact on the $160–270 billion annual market in sectors such as chemicals and energy over the next 10 to 20 years. In China, the influence of synthetic biology may be even more pronounced. As a global leader in fermentation, with its fermentation capacity accounting for 60–70% of the world’s total, China has accumulated substantial resources in talent, technology, and infrastructure within traditional industries. This has also generated greater demand for more advanced production methods like synthetic biology.

In traditional industries, natural products possess complex structures; relying solely on chemical synthesis results in cumbersome pathways, low yields, high energy consumption, and significant pollution. By leveraging synthetic biology to construct rational biosynthetic pathways and engineered microbial strains, a new paradigm for environmentally friendly, large-scale production is undoubtedly provided. Specifically, the integration of synthetic biology can substantially reduce energy consumption in manufacturing, enhance product quality, and offer a more flexible technological platform for diversified product development.

First, leveraging synthetic biology to optimize manufacturing routes offers milder reaction conditions and greater energy efficiency with lower carbon emissions compared to traditional petrochemical processes. Unlike chemical synthesis methods, this approach utilizes natural raw materials and completes material transformation within microorganisms, primarily bacteria, under relatively mild process conditions. Data shows that, compared to traditional synthetic routes, products manufactured via synthetic biology achieve an average reduction of 30%–50% in energy consumption and emissions, with future potential reaching 50%–70%, while also reducing environmental impact by 20%–60%. Such high-efficiency energy-saving performance will undoubtedly significantly drive the replacement of fossil-based routes for industrial basic raw materials, the substitution of high-energy-consuming, high-material-consuming, and high-emission process routes, and the upgrading of traditional industries. This will also facilitate the implementation of synthetic biology technologies in a more diverse range of product scenarios.

Moreover, certain products manufactured via synthetic biology offer significant cost advantages. For instance, the synthetic biological production of 1,3-propanediol reduces raw material costs by 37% compared to petroleum-based routes; the vitamin B2 developed by BASF achieves a 50% cost reduction in its biotransformation process relative to chemical synthesis; and the biological production route for succinic acid lowers production costs by 20% compared to traditional petrochemical methods. Furthermore, Huaheng Biotechnology’s anaerobic fermentation process for L-alanine significantly reduces production costs by 50% compared to enzymatic methods.

Secondly, certain synthetic biology manufacturing processes demonstrate technological advancement and offer superior product quality. Practice has shown that nicotinamide, which is in high demand in fields such as animal feed and food additives, can achieve 100% atom economy when produced using a novel chemo-enzymatic process. This approach overcomes the issue encountered in chemical catalytic routes, where the amination reaction from nicotinic acid to nicotinamide leaves a 4% residual amount of nicotinic acid, necessitating recrystallization for separation. Thus, the technological advantages are significant. Furthermore, the total yield and production efficiency of sitagliptin produced via biosynthetic methods are significantly higher than those achieved through chemical synthesis.

Third, the platform effect inherent in synthetic biology manufacturing enables a single microbial strain to produce multiple products. Previously, engineered *Escherichia coli* strains utilizing synthetic biology approaches have been demonstrated to synthesize various amino acids from glucose, including norvaline, valine, isoleucine, leucine, and phenylalanine. Furthermore, within these amino acid biosynthetic pathways, the introduction of keto-acid decarboxylases and alcohol dehydrogenases facilitates the production of a series of higher alcohols, such as isobutanol, 1-butanol, 2-methyl-1-butanol, 3-methyl-1-butanol, and phenylethanol.

Thus, the integrated development of synthetic biology and the traditional chemical industry—wherein the former facilitates the latter’s transformation and upgrading, while the latter helps the former complete critical links in commercialization—is emerging as a new trend. Supported by mature technological systems and driven by substantial unmet demand, synthetic biology may give rise to more star projects in county-level regions.