May 12, 2021

By Lynda Kiernan, Global AgInvesting Media

If the deals of 2021 had a theme, it would be SPAC mergers. The latest name in agtech to go public via such a deal is Boston-based biotech giant Ginkgo Bioworks (Ginkgo), which has announced it is merging with publicly traded special purpose acquisition company Soaring Eagle Acquisition Corp.

This business merger and listing on the Nasdaq values Ginkgo at $15 billion (pre-money equity valuation) and will provide the company with as much as $2.5 billion in primary proceeds. 

Institutional investors have committed $775 million in an oversubscribed PIPE with anchor investments from Baillie Gifford, Putnam Investments, and funds and accounts managed by Counterpoint Global.

New investors include accounts advised by ARK investment Management LLC, ArrowMark Partners, Bain Capital Public Equity, Berkshire Partners, and Franklin Advisers, who have joined existing investors, Cascade Investment, Casdin Capital, General Atlantic, Senator Investment Group, Viking Global, and funds and accounts advised by T. Rowe Price Associates, Inc.

Founded in 2008, and launched through Y Combinator, Ginkgo Bioworks originally operated on $15 million in federal defense funding. Over the following years, the company developed a method of creating custom microbes using robots that was more efficient and less costly compared to the same process being conducted by human scientists, and that enabled the company “to grow products instead of manufacturing them”. Through this technology (“Foundry”) and the knowledge and re-usable biological assets (“Codebase”), Ginkgo has build a scalable engineering and data platform by integrating a spectrum of life sciences tools into their Foundry to amass a large, flexible, and diverse biological Codebase to facilitate innovation.

Awareness surrounding the potential capabilities of engineered biology are increasingly evident through the development and wide distribution of mRNA vaccines, advances being made in animal-free proteins, and renewable bioplastics. But beyond these examples, cell programing has the potential to have a huge impact on every physical good industry, including food, agriculture, electronics, chemicals, therapeutics, and so on.

“The magic of biology is that cells run on digital code similar to a computer, except that instead of 0s and 1s it’s As, Ts, Cs, and Gs,” said Jason Kelly, co-founder and CEO of Ginkgo Bioworks, Inc.

“Ginkgo’s platform makes it easier to program this code, and we are making this platform available to organizations working to solve our most pressing problems. From mRNA vaccines reaching people’s arms to combating climate change, the opportunity to work with programmed cells has never been more apparent,” Kelly continued. “We are thrilled to partner with Arie as well as the team at Soaring Eagle to bring this vision to life.”

Ginkgo serves customers spanning various end markets, giving them the ability to conduct cell programming R&D at scale on Ginkgo’s platform. This earns Ginkgo usage-based revenue as well as value share in the form of royalties from products that go to market or equity in the partner company.

Current estimates indicate that companies spend approximately $40 billion each year on R&D that could be supported by Ginkgo’s platform – and McKinsey Global estimated in a recent institute report that the overarching market for bioengineered products (of which Ginkgo could potentially earn a value share) could reach $2 billion -$4 trillion over the coming 10-20 years. 

Ginkgo expects to generate $150 million in revenue in 2021 – approximately 96 percent growth year-on-year. However, the significant capital raised through this SPAC merger and listing will dramatically increase the scale of the company’s tech platform and drive an ecosystem for cell programmers, allowing for new programs with the potential to solve some of the world’s most pressing problems such as climate change, pandemic responses, and food security, to be able to launch on Ginkgo’s platform each year. 

“Eagle Equity Partners continues to focus on companies that are in a category of one,” said Harry E. Sloan, CEO, Soaring Eagle. “Ginkgo is not only a leader in this field, but its founders launched the modern practice of synthetic biology.”

“There has never been a more critical time to employ Ginkgo’s technological achievements and efficiencies toward solving so many real-world problems—environment, food, and health to name a few,” added Sloan. “We’ve been so impressed with Jason and his co-founders’ sense of purpose and we believe that this team will be the ambassadors of these advances for decades to come.”

Post-listing, Ginkgo will continue to be led by co-founder and CEO Jason Kelly and co-founder and president/COO Reshma Shetty. The balance of the founding team will also be retained, including CTO Barry Canton, head of strategy Austin Che, and Tom Knight – the “godfather of synthetic biology” and DNA hacker.

The boards of directors of both Ginkgo and Soaring Eagle have approved the deal, which is expected to close in Q3 2021, however it will still require approval from stockholders of both companies, and is subject to securing certain regulatory approvals.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.