“Engineering biology is a powerful underlying technology that enables new products and manufacturing approaches in numerous vertical sectors. It drives a more sustainable approach to manufacturing, offering high impact replacement products as well as those with truly novel functionality. It is as transformative as AI’ explains Oliver Sexton, Investment Director from the UKI2S Fund. “We back companies using engineering biology as a core part of our investment thesis as it strongly selects high impact, high growth entities competing with robust IP in very large markets with ground breaking solutions.”
FPC is a global impact-led venture capital firm headquartered in London. It manages the £102M UK Innovation and Science Seed Fund (UKI2S) which has £33m of capital dedicated to engineering biology investments. FPC is focused on investing in these and other high-growth businesses that contribute positively to societal and environmental issues as well as aligning with the UN Sustainable Development Goals.
With a portfolio of 140 companies notable exits include 23andMe, a genetic testing company, and OxfordVR, specialising in virtual reality therapy for mental health and Quethera, an eng bio biotech.
UKI2S is an early-stage investment fund that nurtures innovative businesses from great UK science to leverage private investment and grow jobs. The fund is backed by the Department for Science, Innovation and Technology and other public bodies, including UKRI UKAEA and MOD. This fund has supported a wide array of companies in sectors ranging from therapeutics and agritech to clean biotech.
Technology development using engineering biology is potentially high return. Whilst biology is complex, by applying engineering principles and breaking down pathways to key steps, it can be de-risked and also enhanced. Whilst this complexity means investors may face some worrying moments as technology develops it means the end solution is novel, highly functional and very differentiated. An engineering biology company isn’t going after incremental improvements, it will replace a product with a superior solution.
FPC has a dedicated team to aid in the evaluation of technical innovation. “In the UK team, there are individuals with PhD and masters qualifications in STEM subjects to carry out due diligence. We also utilise external consultants to help understand the science behind a company’s product. We couple this with discussions with potential customers to understand a product’s viability,” says Sexton.
Delivering such complex R&D efficiently and quickly means learning from others. Accelerator programmes can provide companies with useful exposure to investors and opportunities to secure investment and as importantly, training in planning, budgeting and managing companies. FPC has co invested alongside accelerator programmes and Sexton explains, “There are some programmes with very good reputations and have produced great things. We may invest in parallel whilst a business is participating in an accelerator programme. Often, the amount of equity provided by the accelerator is not sufficient, especially in biology,” says Sexton.
Sexton explains how businesses benefit from FPC investment, “We have a rich network and dedicate time to helping teams focus the plans and business model. We really try hard to introduce companies to other funds, to executives and board members. It is also not uncommon for us to provide connections and then invest in a business at a later stage as plans develop. FPC is also well connected to corporates. This allows us to help portfolio companies find corporate customers or corporate investment.”
Sexton highlights the importance of compatibility between entrepreneurs and investors: “Investing is more than equity. You need your investor to be supportive and helpful throughout. As you will be working together over time its fundamental to make a good team.”
