Investing in Amai and the Case for ‘Bits and Atoms’ Fueling Sustainable Innovation.
At ZORA, we are excited to announce Amai Proteins as our fourth investment in the ZORA Israel Impact Fund. This investment not only has immense commercial and ‘impact’ potential, but also exemplifies a broader thesis held by ZORA:
That the convergence of computing and biology (“Bits and Atoms”), coupled with increasing consumer demand and regulatory pressure, is catalyzing corporates to remake basic “stuff” more healthfully, sustainably, and resource-efficiently.
Amai is developing a platform technology to design and produce novel proteins for a wide range of food and beverage applications. The team’s first products are sweet-tasting proteins, a new healthy and tasty alternative sweetener, used to dramatically reduce sugar content in beverage and dairy products, a $46B industry.
The company has made significant strides since its founding in December 2016. Led by the ultra-talented Dr. Ilan Samish, the team has produced a proof-of-concept of the world’s sweetest alternative sweetener, 10,000x sweeter than sugar, and is conducting product development alongside Pepsi-Co, Danone and similar brands. They have now reached the scale-up phase before commercialization.
The Fight Against Obesity and Diabetes 🏋️♀️
Amai was founded to produce sweet-tasting proteins in order to reduce food sugar content and battle our world’s growing diabetes and obesity epidemics. These conditions are two leading causes of death by non-communicable diseases and a significant drain on healthcare resources.
- 4.4M global deaths are attributed to obesity and diabetes each year, representing 11% of the 41.0M deaths from non-communicable diseases. 
- Obesity and diabetes account for 22% of global healthcare costs. 
Inspired by Nature.
The Company’s sugar alternative is inspired by a small variety of plants that grow along the equator. These plants produce healthy sweet proteins that are 3,000x sweeter than sugar, but are not fit for mass-market production. They lack stability in acidic and high-temperature environments, have a sub-optimal taste (e.g., slow-onset, lingering taste), and are not able to be cost-effectively extracted or commercially farmed.
Amai’s core competency is its ability to design and produce a never-before-created sweet protein with a unique 3-D structure that mitigates these aforementioned negative characteristics.
Designed via Computers. Produced via Fermentation. Tasted by Foodies. 💻🧬🍹
We invested in Amai because of their world-class, interdisciplinary R&D capabilities. This expertise spans three domains:
- Computational Protein Design: Amai computer engineers the redesign of the protein, employing a host of statistical models, proprietary algorithms, and industry software tools. Up to 30% of amino acids, the sub-unit of proteins, are altered. Today, there is still a relatively small pool of individuals with expertise in protein design, as it requires a unique mix of scientific, computational, and mathematical knowledge.
- Biotechnology: The novel protein is then physically expressed by genetically engineering an organism to produce the protein via fermentation.
- Food Technology: Lastly, food technologists evaluate the sensory performance of the ingredient by itself and within various recipes. This provides a feedback loop to the computational protein design team.
We think very highly of the Company’s R&D firepower. The CEO, Dr. Samish, is a recognized subject-matter expert on computational protein design, having published a leading textbook in the area, and Amai’s food technology department employs SodaStream’s former R&D Head of Syrups.
Additional Drivers of the Investment
Besides Amai’s technical achievements and talent, below are additional drivers underpinning our investment:
- Regulatory pressure to curb sugar intake is increasing, especially outside of the US. Sugar taxes are in place or scheduled to be enacted in at least 18 countries. 
- Significant consumer demand exists for sugar-reduced products. Seventy-one percent of American consumers read the sugar content on ingredient labels and 46% strongly want to reduce their sugar consumption. 
- Food manufacturers are responding and adapting. Sixty-six percent of new product introductions are ‘no sugar’ or ‘reduced sugar’. 
- Amai’s protein is healthier and tastier than its competitors, such as stevia. Amai is digested as a protein, and thus, has no caloric value, no effect on insulin response, and no influence on the microbiome. While stevia has no calories, studies indicate that the ingredient is not efficiently absorbed by the intestines and thus, may impact the kidney, liver, and gut biome.  Moreover, Amai’s product is redesigned to enhance the taste (e.g., slow onset and lingered aftertaste) while stevia currently maintains a bitter aftertaste.
- Amai’s protein is cost-effective. Because Amai’s sweetener is 10,000x sweeter than sugar, food manufacturers only require small amounts to mimic sugar’s performance. This is estimated to keep the price cost-competitive and margins high.
‘Bits and Atoms’: A Timely Engine for Sustainable Innovation.🚀
As Vanessa writes in her Feb 12 blogpost, “Hey, What's the Matter,” ZORA is increasingly bullish on companies that are powered by ‘Bits and Atoms’, like Amai. We believe significant innovations over the next five to ten years will consist of recreating the basic “stuff” of our everyday lives to be more healthful, sustainable, and resource-efficient.
Precision biology — the convergence of artificial intelligence, machine learning, and the cloud with modern biotechnology activities like gene engineering, computational biology, and synthetic biology — is unlocking new value in our economy.
This is increasingly apparent based on the funding rounds of companies providing ‘biotechnology as a service’ to other precision biology start-ups in agriculture, food, pharma, and other industries. Gingko Bioworks and Zymergen are two examples. These companies raised a $290M Series E in September 2019 and a $400M Series C in December 2018, respectively. Valuations also underscore the prospect of these start-ups. For example, based on 2019 projected revenue of $80M per Forbes, Gingko Bioworks’ 2019 valuation of $4.2B, implies a valuation to revenue multiple of 52.5x. 
Precision Biology: Why Now?
The precision biology sector has been catalyzed by three major technical advancements that occurred over the last decade: 
- Decreased cost and increased accessibility of computing. This has only been further supported by Amazon, Microsoft, and Google competing for business and thus, providing $100K+ cloud grants to start-ups.
- Decreased cost of data storage, which is integral to storing the analytics of biological systems.
- Advancements in genetic engineering. The costs of analyzing a genome and creating synthetic genes have decreased significantly. For example, the cost of fully sequencing the first human genome was $1B in 2000 and took 13 years. Today, it takes just a few days and costs about $1,000. 
First Mover in the “Second Domestication of Plants and Animals” 🌾🐮
Our investment in Amai further aligns with the bullish outlook that the convergence of software and biology will transform our food production system. Recent advances in precision biology are leading companies to use micro-organisms — as manufacturing facilities — to cost-effectively produce agricultural inputs and food products from the ‘molecule-up’.
RethinkX calls this the “…second domestication of plants and animals. The first domestication allowed us to master macro-organisms [e.g., cows]. The second will allow us to master micro-organisms.”  Building products from the “molecule-up,” in time, will be more efficient than slaughtering cows, farming sugar plants, or growing cotton for clothing, activities that contain externality costs from land, feed, water, energy, and transportation.
While we are still in the early innings of this transformation, a cadre of precision biology start-ups making food ingredients healthier and/or more sustainable highlights this trend. The most pertinent example is Perfect Day Foods (others include MycoTechnology and Nature’s Fynd).
Founded in 2014, Perfect Day produces animal-free dairy protein by genetically engineering microflora to express the exact same dairy proteins produced by cows. As an initial foray into the market in June 2019, Perfect Day, sold out their limited inventory of non-animal, but still dairy ice cream in one day (priced $20 per pint). By December 2019, the company raised $140M at a valuation of $440M, even before receiving FDA approval required for widescale distribution of its dairy ingredient.
ZORA is incredibly encouraged by Perfect Day and Amai’s success since both are producing novel food ingredients via genetic engineering and fermentation. However, because Amai is producing a never-before-created sweet protein vs. reproducing a known protein, the team is developing an even deeper expertise in computational protein design. We see this as a strength as novel food ingredients increasingly become produced by ‘Bits and Atoms’.
 Non-nutritive sweeteners possess a bacteriostatic effect and alter gut microbiota in mice, PlosOne, July 5, 2018
 Synthetic Biology Company Ginkgo Bioworks Tops $4 Billion Valuation, Forbes, Sept. 19, 2019
 Synthetic Biology Company Ginkgo Bioworks Tops $4 Billion Valuation, Forbes, Sept. 19, 2019