Synthetic biology firm Zymergen raises $500 million in IPO

Zymergen, an Emeryville, California-based synthetic biotechnology and manufacturing firm, has raised $500 million in an initial public offering (IPO) of stock on the Nasdaq exchange that values the 8-year-old company at over $3 billion.

The move comes about 4 months after Zymergen launched its first product, a polymer film for electronic displays, called Hyaline, that it developed with Sumitomo Chemical. Zymergen makes the film from a biobased monomer it produces from sugar using a modified microbe.

In September 2020, Zymergen raised $300 million from investors on the basis of its product pipeline and partners, bringing its total funding from private investors to over $870 million. In addition to Hyaline, the company has other high-performance films on the way as well as consumer products such as an insect repellent. And it is working with FMC to discover natural products for crop protection.

Priorities for the money from the IPO include investment in the company’s highly automated labs for materials discovery and microbe engineering as well as facilities for scale-up and manufacturing, Zach Serber, Zymergen’s chief science officer, tells C&EN. The company is now scaling up production of Hyaline at a contract manufacturing facility in Japan, though so far it has not reported meaningful revenues from product sales.

Serber says a combination of factors led to the decision to go public. “Our platform is ready and we have a product in the market and our customers love it,” he says. “Our pipeline of products is strong and growing.” At the same time, Serber adds, “biotechnology and manufacturing require capital and liquidity.”

Renewable-material IPOs have been scarce in recent years. In 2017, the Dutch renewable polymer start-up Avantium raised roughly $116 million on the Euronext exchange. Two other US synthetic biology firms often grouped with Zymergen—Ginkgo Bioworks and Genomatica—remain privately-owned.

However, earlier this year Origin Materials and Danimer Scientific, which make biopolymer inputs and biopolymers, respectively, raised money from public investors via special purpose acquisition company—or SPAC—takeovers. Their success, along with Zymergen’s, in raising funds, indicates strong demand for shares of companies that make renewable materials.