SOSV 1,000 Startups Series: IndieBio & The Future of Human and Planetary Health
In 2020, SOSV invested in its 1,000th startup. In this series, SOSV GPs share insights on some lessons learned on the way, and the future of their sector.
“COVID-19 is opening the eyes of investors to biology”
— Arvind Gupta, Founder of IndieBio & General Partner at SOSV
Program name: IndieBio
Program focus: Using biology as technology to solve human and planetary health problems
First program year: 2015
Number of Investments to date: 132
SOSV GP (interviewed below): Arvind Gupta
How would you describe the focus of IndieBio?
AG: I created IndieBio with a very simple idea: that biology is technology that can solve the world’s very biggest problems, which span from climate change to disease. Over the years I came to realize there’s a better way to say it, which is: biology is technology that can solve for human and planetary health problems of entire population scale.
“Biology is technology that can solve
for human and planetary health problems
of entire population scale”— Arvind Gupta
It’s incredibly difficult, and it’s incredibly hard, but also incredibly rewarding. If I were going to dedicate my life towards helping others, trying to build companies, this is the area that for me was worthwhile to make a life’s work. In the long run, in 12 years, hopefully we’ll have launched multiple — dozens — of companies that have made a real dent in these problems in the world, using biology.
What’s your current perspective on your sector?
AG: In planetary health, it’s never been stronger. We just came off a record first quarter in terms of series B financing, and Q2 is not slowing down despite COVID.
Because of COVID, all sorts of investors that have never really thought about biology are now realizing they’re powerless at home because of biology.
- They’re now thinking about diagnostics, they’re thinking about all these technologies that would be able to free them from their homes, and how big the market size is actually.
- Alongside that in the planetary health realm, everyone’s basically seen COVID as an opening act for climate change.
I think the understanding and the firsthand witnessing of a global scale of disruption is opening eyes of a lot of investors. So life sciences, and biology as technology, is bigger than ever.
Has your investment focus been durable over time?
AG: Absolutely. What’s changed is the increasing awareness of other VCs to buy into what we’ve been doing. And as the market evolves — as people are inspired by those first investments — newer ones show up.
One example is food. In Batch 1 we did Clara Foods, and Batch 2 we did Geltor and Memphis Meats. We were doing a lot of food early on, and that was a very simple thesis as well: Climate change is very real to millennials, huge parts of the market. The critical insight is that they want to vote with their dollars towards doing something. So what’s the only way you can vote with your dollars, to put a dent in climate change? Changing the way you eat. So it wasn’t about veganism, it wasn’t about being vegetarian that drove all these investments. It was always about climate change because that’s the broad market. And that’s the value proposition for that market.
As food just exploded and took off, now sitting five years later — the second wave of that is clearly going to be sustainability as an asset class. In other words, if we could remake our food supply chain, why can’t we remake every single supply chain to be more sustainable, using biology? That’s where we are looking at now.
Can you name a few portfolio highlights and what made them great?
AG: I’ll start with Memphis Meats, because it was a classic IndieBio company. It was an outrageous idea. You know, if you make a meatball using STEM cells — yeah, someone had done that — but:
- If you did, would it taste good? Who knows?
- If it tasted good, can you feed a lot of people? Who knows?
- If you could feed a lot of people, would they eat it?
- Would they buy it?
It was a lot of unknowns, a lot of risks, but it’s much about the market. So it was an easy bet to make. Uma Valeti is a great entrepreneur, and he’s gone on to kind of be the leader of the movement of cell-based meats alongside our other food investments.
Geltor, real gelatin without the animal, is another one, led by another fantastic entrepreneur Alex Lorestani. So on the food side there’s several, and Memphis Meats is classic because it just addresses extremely large markets.
On the human health side, we have a company called Synthex which is a platform approach to create drugs for targets that are normally undruggable. So through a very powerful synthetic biology platform, they’re able to find oncology targets better than almost anyone else, and recently have a very promising lead for KRAS, which is widely considered undruggable in cancer.
Similarly in human health we have DNAlite. DNAlite has a twist on genetic engineering where we’re delivering the DNA of a drug to the cells in your intestine and then having the intestinal wall make the drug. So putting the drug back into your body. There are so many more that I can go through. But that gives you some scope of the risks we want to take and how different we like to think in terms of the solutions we’re looking for, and the types of companies we’re looking for.
Have you seen changes in geographic and gender diversity in the portfolio?
AG: Yes. Latin America has become something that’s very hot. We are getting really good entrepreneurs from Latin America who are doing extremely well. Argentina and Chile in particular.
Also, women, females have always been a big part of the IndieBio portfolio. I’m really proud of that — 41% of our co-founders are female, and that completely blows all the other numbers out of the water. And for us, for me, diversity is the advantage, and one of the things that really has driven the spectacular results of IndieBio.
What are the biggest opportunities that you see today, and over the next decade?
AG: Solving for climate change is the greatest entrepreneurial opportunity of this lifetime.
