One of the big lessons we learned was: No matter how cool a technology is, no matter how well it works and how efficient it is, the underlying economics are essential.

Derek Greenfield is explaining to me his path from the biofuels company LS9 to the conception of his new company: Industrial Microbes. LS9 raised $81 million in an attempt to make jet fuel from sugar but ultimately sold as a wash to Renewable Energy Group. Part of LS9’s struggle was the high price of their sugar feedstock.

If you start from sugar as a raw material, you are very limited in what commodity products you can make. That was one of the lessons we took away from LS9.

Last year Greenfield and two of his LS9 colleagues, Elizabeth Clarke and Noah Helman, conceived Industrial Microbes as a solution to the expensive feedstock problem. “Right now carbon dioxide and methane from natural gas are the cheapest forms of carbon that are really useable,“ explains Greenfield. They hope to become the experts in engineering industrially relevant microbes to utilize natural gas.

You can take all different kinds of waste and use technology called anaerobic digestion to turn it into biogas, which is basically methane and CO2. It would be amazing to be able to convert that into liquid fuel or bio-based products.

The new company is already gaining momentum. Following in the footsteps of Ginkgo Bioworks, they graduated from Y Combinator this past winter, the tech seed fund that propped up Airbnb, Dropbox and Reddit. They won $500k from the CCEMC’s Innovative Carbon Use Grand Challenge with a proposal to convert natural gas to malic acid. They were also awarded an SBIR contract from the EPA this year to develop sustainable green technologies. Of the 19 companies that received this honor, they were the only biotech startup.

Industrial Microbes won Gen9’s G-prize, granting them half a million base pairs of custom DNA to test new enzymes. Photo source: Gen9.Perhaps most empowering, Industrial Microbes won Gen9’s G-prize last month. The reward is 500 kb of synthesized DNA, which will allow them to test an enormous toolkit of enzymes untouched by scientists and synthetic biologists.

We wanted to get our hands on sequences from uncultured organisms - sequences from databases - and test them in the lab. We also wanted to refactor those genes, because we’re testing them in lots of different industrial organisms.

Refactoring refers to rewriting the DNA of a gene to optimize codons for a new organism, and to remove any unknown regulatory features that might be encoded in the original DNA sequence. This was the first time the contest was open to non-academic participants, but it will be available to startups again this year.

Engineering metabolic inputs, not outputs

A number of biotech companies are currently taking the opposite approach to the same cheap feedstock problem: Intrexon, Zuvasyntha, Ginkgo Bioworks and others are engineering naturally methanotrophic microbes to artificially produce a desired output. They face the challenge of working with organisms less genetically tractable than E. coli and S. cerevisiae. Engineered pathways often need to be drastically retuned when moved between organisms.But modifying common industrial species to utilize cheaper feedstocks would be incredibly valuable. If successful, Industrial Microbes’ technology could be compatible with production systems already developed by biomanufacturing companies. Indeed, the company is actively looking for partner companies. Common model organisms also benefit from a large body of preexisting metabolic engineering literature. The complex synthesis of high value alkaloids in yeast gained much attention from the press this summer. “There are no known yeast that can consume natural gas to grow,” Greenfield reports.

There is no scientific reason why you shouldn’t be able to do that…..and it’s more efficient to make many things in yeast because they’re acid tolerant - solvent tolerant.

From a bioengineering perspective, Industrial Microbes is tackling an ambitious challenge that will involve systems level reoptimization. “We may need to rebalance other carbon pathways - it’s definitely a global approach here,” explains Greenfield.

One interesting thing about working on the input side, rather than the output side, is that there is a completely different set of challenges to tackle. It’s always fun to apply knowledge in one area to a different problem.

Sugar-Free Flexibility

The challenge this company faces is not a simple one, but if successful, Industrial Microbes has the potential to significantly change what synthetic biology can offer mankind. Reducing feedstock costs for standard industrial organisms would increase profit margins and make renewable bioconversion an option for many chemical processes. For now, Industrial Microbes is looking to work with chemical companies to reduce their production costs and environmental impact. But if they can improve the quality, scalability and efficiency of their systems enough, they hope to re-enter the fuel market.

Fuel is hard, but it’s still an important problem and it’s our dream to someday return to it.