Jan 20 2011
The many bioplastics and biofuels start-ups all claim cost parity and scalability, but in reality rising economic and business pressures, encroaching corporate competitors, and stiffening regulations threaten to force many start-ups out of the game, while a select few will go on to find commercial success.
In its latest report, Lux Research applies its proprietary analytical tool, the Lux Innovation Grid, to identify which bioplastic and biofuel start-ups represent the best candidates for game-changing partnerships.
The report, titled “Today’s Top Technologies in Bioplastics and Biofuels,” aims to help corporate, government and private investors act quickly and decisively in forming partnerships among the dwindling pool of likely winners. It examines firms pursuing six main processing technologies: fermentation, gasification, synthetic biology, chemical processes, crop enhancement, and algae processes. It analyzes each in terms of dollars spent, corporate interest, and technical innovation. It then applies the Lux Innovation Grid to compare start-ups competing in each field by their technical value, business execution, and maturity.
“The market for bioplastics and biofuels has matured since we last compared companies in the Lux Innovation Grid. Clearly defined winners and losers have emerged from what last year had been a pack of largely indistinguishable, under-financed start-ups,” said Andrew Soare, an analyst for Lux Research and the report’s lead author. “Companies that are merely treading water today are falling behind as increasingly dominant players land large funding rounds, forge corporate partnerships or expand their production capacity.”
Lux Research analysts drew information from more than 300 interviews with executives of companies working in the space. Among its key findings:
- Fermentation and gasification offer the clearest paths to commercialization. Leading fermentation technologies are expanding their feedstock portfolios to include cellulosic sugars, and produce chemicals such as succinic acid and butanol. Companies such as TetraVitae or Genomatica warrant a closer look, as cost reductions in industrial chemical production are in reach with the right corporate support. Meanwhile, innovative gasification companies are converting many feedstocks – even municipal and agricultural waste – into a range of fuels and chemicals. Clients aiming to capitalize on growing waste problems should consider companies like Ze-gen.
- Synthetic biology leads in investment dollars. Although synthetic biology companies trail in terms of commercialization and scale, flashy claims of custom-built bugs able to metabolize many feedstocks into a wide range of complex chemicals and drop-in fuels have captured the attention and dollars of investors. Notable partnership candidates include early-stage synthetic biology companies like Verdezyne, which is developing adipic acid, and Amyris, which is producing artemisinin, diesel, and other specialty chemicals.
- The overpopulated space for algae technologies will largely dry up. Despite the hype over low cost and high yield of algae processes, players in this over-populated space will need to form an integrated value chain or else fail. Solazyme and Algenol alone stand out, respectively, for novel fermentation processes and business partnerships.
“It’s critical for large companies to act now because many start-ups in the space are seeking financing and/or partnerships,” said Soare. “But few start-ups are likely winners, and securing the wrong partnership with the wrong company could cause corporate players to fall behind their competitors. This report will help corporations know when to answer the phone.”
“Today’s Top Technologies in Bioplastics and Biofuels,” is part of the Lux Bio-based Materials and Chemicals and the Lux Alternative Fuels Intelligence services. Clients subscribing to these services receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Bio-based Materials and Chemicals Journal or the Lux Research Alternative Fuels Journal, and on-demand inquiry with Lux Research analysts.
Source: http://www.luxresearchinc.com/