The estimated $974 million investment represents a 28 percent increase from 2013, suggesting companies that endured the waves of economic disruption have gained maturity and regained investors’ confidence, says the report, titled Dynamics of Venture Capital Funding in the Bio-based Chemicals Industry.
Lux Research analysts studied the investment landscape for biobased materials and chemicals, evaluating venture capital, corporate venture capital, IPOs and mergers and acquisitions activity.
Among their findings:
- North American companies dominate. Driven by technology entrepreneurship and a favorable investment environment, North American companies cornered 87 percent, or $2.2 billion, of the total venture capital funding for the BBMC sector over the past three years.
- Fermentation leads technologies. Among technologies, fermentation took home the largest share of investment, with companies in this space pulling in nearly $3 billion total since 2000, hitting a peak of $475.6 million in 2011.
- Mergers and acquisitions is on the rise. Subpar performances from companies such as Gevo and Amyris have dampened the public markets’ enthusiasm for the space. As a result, many start-ups have scrapped IPO plans and sought other exits — witness Stora Enso’s acquisition of Virdia, Renewable Energy Group’s purchase of LS9 and Cereplast’s cheap acquisition of Trellis Earth.
Earlier this month the US Department of Agriculture released a report that synthesizes existing bioeconomy literature and explores how government policies and industry business-to-business sustainability programs are driving the biobased economy. The report is a prelude to a more comprehensive upcoming economic study to be released by the USDA’s BioPreferred program on the economic impacts of the biobased products industry.
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