How The Bioeconomy Adapts

Hi everyone and welcome to the interview and analysis corner! This week, we’re going to hear from our go-to biotech specialist: Eshan Samaranayake.

He’s telling us what he learnt from his recent conversation with the Managing Director and CEO of Bioshyft, Gerrit Feuerriegel, who broke down how start-ups, especially in the food tech space, should adapt to funding challenges and what trends we can expect in the near future. Let’s dig in.

Hi there, Eshan speaking.

I recently had a great chat with Gerrit Feuerriegel, the CEO of Bioshyft and a man with a passion for developing the bioeconomy, from food tech to sustainable fertiliser.

Based in Germany, Gerrit is on a mission to accelerate growth among startups, investors, corporations, and service providers that are focused on biotech innovation.

What is Bioshyft?

Bioshyft is an awesome online platform that acts as a database and a marketplace for over 32,000 start-ups where companies can show off their innovative products in the world of food, agriculture, water conservation and more.

Bioshyft can also be used to connect these smaller companies with potential investors. Think of this as a more developed social media platform for those specifically in the bioeconomy.

So, when Gerrit has something to say about the future, I fully intend to listen.

Adapting to hard times

It’s no secret that deal making and funding for start-ups in the bioeconomy have taken a hit recently. And for Gerrit, the solution for struggling companies is to focus on the end customer's needs rather than solely on attracting investors.

In a low-investment environment, it is vital to focus on efficient use of resources and steady growth. This customer-centric, low-cost approach is the core idea behind growth during disappointing economic cycles.

Gerrit outlines five key areas for biotech start-ups - whether in food or otherwise - to consider when navigating a tough investing environment:

• Flexible personnel expenses. Maintain a small core team for essential processes and outsource other tasks to freelancers to lower costs.

• Reduce capital expenditure. Startups should work with external pilot facilities and smart equipment instead of building everything from scratch.

• Focused expenses. Concentrate your expenses on your unique selling point and avoid unnecessary spending.

• Early engagement. Engage in early collaboration with Business-2-Business customers through pilot projects and test labs, even if the product or technology is not fully commercialised.

• Favourable payment terms. Negotiate favourable terms with equipment suppliers who may be willing to finance pilot equipment, allowing startups to defer payments until they start making revenue.

The future of the bioeconomy

In light of this advice for young companies, here is what Gerrit had to say about the future of biotech and investment into the bioeconomy.

One big trend that Gerrit is seeing is the increasing government support for the bioeconomy in Europe. This support is vital for helping innovations “cross the chasm” in the innovation cycle (see below), providing a much-needed boost to the sector.

On top of that, Gerrit sees huge potential for start-ups that focus on developing alternatives to key raw materials that are becoming more expensive due to climate change or regulatory developments.

If an ingredient is expected to become more expensive - due to global warming - in the future, it could present an opportunity for startups to develop cost-competitive alternatives that will be ready in 3-5 years.

Citing chocolate as an example, Gerrit spoke about the 10-year commercial partnership between the US startup, California Cultured, and the Japanese chocolate giant, Meiji, where Meiji will be using California Cultured’s cell-grown cocoa in their products.

And lastly, Gerrit highlighted the potential of something called the “closed-loop bioeconomy” in which machines, tools, and methods will be shared within the bioeconomy to increase efficiency.

For example, the CO2 from a yeast fermentation facility could be used to grow microalgae in bioreactors for other industries. Indeed, it would be amazing to see cross-industry cooperation at scale.

What we see here is that, despite the difficult investing environment for biotech companies at the moment, there is still hope and reason to keep pushing forward with innovation!