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Ginkgo Bioworks (YC S14) is going public today (blog.ycombinator.com)
151 points by todsacerdoti on Sept 17, 2021 | hide | past | favorite | 66 comments

If anyone will enable the world to engineer biology, it's Gingko.

Their team has built a platform for biological engineering since day 1.

This is the summary:

* platform for engineering biology (unfair advantage is they've taken this "not a product company" approach since 2009)

* investing up the ecosystem by taking upside in products they engineer for larger companies (not sure if they have an unfair advantage here besides creative financing and momentum, IPO helps with that)

* investing downstream into startups by providing their platform in exchange for equity (YCbio partnership seems like an unfair advantage here)

* mindshare of new minds (iGEM itself is a breeding ground for future synbio employees and leaders who dream of joining Ginkgo, Ginkgo founders co-created iGEM)

Pretty perfect flywheel right there, even if it risks being a spaghetti monster from a corporate structure and cashflow standpoint.

So cool to see this finally coming to light as an IPO. While I don't understand the SPAC benefits, Ginkgo's structure to be able to invest resources into synbio startups in an equity exchange sets them up really well for future cashflow even if the present is not.

(Disclosure Ginkgo bought lab equipment from me in the early days, and I just bought their stock today) https://www.ginkgobioworks.com/2009/09/01/pearl-biotech-open...

I sold my Ginkgo today. I like the company but... Most of their revenue is stock in affiliated companies. I don't think they have a real business today, and the valuation is insane.

Amyris actually has a synthetic biology business. It's less flashy but it's real.

How come you had Ginkgo stocks?

I bought shares in the SPAC a few weeks ago, expected a jump on the IPO news, it worked out.

How do you buy shares in the SPAC? Is there a minimum amount? Which platform can I use to buy shares in the SPAC?

SPACs are publicly traded. The announcement that Soaring Eagle was taking Ginkgo public was made in May. https://www.prnewswire.com/news-releases/ginkgo-bioworks-to-...

No special access is needed to trade SPACs, just need to follow the news. That being said, I think that most SPACs are pretty bad deals.

Have any other YC companies announced SPACs like this? :)

Disclaimer - Not financial advice

SPAC's are incredibly risky. When they IPO they basically are shell companies with no operating revenue. So their valuations are essentially fake (some get better market caps because the people who create them have "track records"). Once a startup converts into them their valuation becomes much more interesting. It's a huge gamble. A SPAC that hasn't converted yet is essentially a guessing game. If the SPAC is valued at $500M pre conversion and the market doesn't think the company is worth $500M then you can lose a lot. The opposite is also true.

Note - its much more complex than this, but this is the general idea.

And I think it's pretty random which ones have lock-ups and which ones do not. Generally speaking their lockups are more liberal than traditional IPOs, correct? So it may depend on how disciplined the company's large shareholders are.

yep! have def had one drop after conversion.

Ive been following this method. A little outdated but still works: https://thunderclapresearch.com/a-risk-free-way-to-make-mone...

synbio.. wow, talk about flashbacks to genetic hacking cyber punk scifi

An interesting story about this from MIT technology review :https://www.google.com/amp/s/www.technologyreview.com/2021/0...

I'm currently looking seriously at creating a synthetic biology software startup. Like a poor mans ginkgo.

These guys are MASSIVE in the space. Think Google back in the day.

I predict this will be a hot stock.

Edit: if you're also interested in starting synthetic biology startup please get in touch.

I’m a major contributor to a synbio software package https://github.com/TimothyStiles/poly and I also do quite a lot of robotics in the space (have a full DNA foundry running in my house, that took a lot of software).

Already starting something in the space, but I’d be happy to talk!

That's very cool! I'll be reading your blog for the next few days; I very much like your view of innovation and liberty. I've only had a quick scan so far, but it seems absolutely dripping of the fun proteases we love to mouth-pipette.

If I may ask, how did you get started? What would your advice be for the motivated amateur? I started in a microbiology degree, transitioned to math, and now I'm about to graduate with my compsci. It's always seemed that there are much deeper connections than was revealed during my courses.

I once told my biology professor that my dream was to innovate in lab technologies. He told me, point-blank, to squash that; the field is oversaturated and we've got as good as we're likely to have for a few decades, so he said.

Do you agree? If not, what do you think are the most glaring market inefficiencies?

I got a virology textbook in 6th grade that I fell in love with, and then started doing at home biotech stuffs with a GFP transformation kit from BioRad that my teacher let me take home in 7th grade. Bit unconventional!

For an amateur, I'd recommend 2 things: go to as many conferences as possible (I'm not sure in other fields, but in biotech I think it is important) and get somebody else to pay for you hands on biotech experience.

Don't listen to your biology professor; he's probably part of the problem.

There are a ton of market inefficiencies. Ginkgo, for example, mainly uses metabolic engineer's knowledge to create challenging new products. What if we could automate the job of metabolic engineering? Though in the end case, it all comes down to if you can make money by solving that market inefficiency, which in biotech, is not always true.

You also have to be in the treacherous middle ground of "not doing bullshit" but also "doing shit". Talk to lots of people to figure out where that is. Happy to call if you'd like!

I'll email you to start with, I'm a little hesitant to post PII on public forums; it'll come from my username@bitsoflore.net. You've given me a lot to think about!

To keep this public dialogue going: are there any biotech conferences you'd specifically recommend? Or are there not any bad choices? I'd also love to get the name of that virology textbook!

Also, to anyone reading this with any interest in biology: I highly recommend that you read this commenter's blog. Here[1] is a link to my favorite post thus far, wherein an actionable plan for a low-cost distribution of material is speculated upon (to put it lightly).

[1] The Sporenet Protocol: https://blog.libredna.org/post/sporenet/

I'd recommend iGEM, Synbiobeta, and the Biosummit (when the conferences are in person). Synbiobeta for industry, biosummit for the hacker vibes, and iGEM because almost every synthetic biologist passes through iGEM (plus can meet a bunch of cool people in similar situation)

There aren't really many bad conferences, just ones with different focuses (SEED for example is a very good science conference). Go to the one that matches your focus.

Here's the virology textbook - https://www.amazon.com/gp/product/0801663911 It's an oldie, but a good introduction.

Thanks for the good review :) Happy to send you some DNA using the Sporenet Protocol! It actually works, but the main problem is that there aren't materials (yet) to distribute using it. Building a company with a few friends of mine to build those materials.

At this point they're massively overvalued if you ask me, that seems to be the case for every synthetic biology company but this one takes the cake.

I totally agree, but it seems like everything with a good story is overvalued these days.

Yeah that's a fair point. I do believe there is value in synthetic biology, so I try to keep up with what happens a bit at least :)

I'm interested, but in the it's-something-I-aspire-to-some-day-when-I'm-not-so-incompetent sense. However! I'd love to engage with you to hear about what's up! Is your inbox open to general curiosity, or would you rather keep emails limited to serious takers currently?

Happy to chat with anyone. :)

Sounds interesting. Maybe this question would sound weird but how do you get an idea for a product? I mean in synth biology. Like. I think that I can produce this chemical with bacteria more simply/cheaply?

Congrats! The 7th YC company to IPO: https://www.ycombinator.com/topcompanies/

News says it was a SPAC and not an IPO.

Wow - YC has been around for 15 years and only 7 IPOs. That is an interesting track record.

That is very unfair.

VC is a long-term business, with the average time from founding to IPO ranging from 8-10 years depending on the year. If you look closer at this list, you'll see companies about to IPO (Amplitude, Relativity Space, Embark Trucks) and several multi-billion dollar exits (e.g Segment <> Twilio, Twitch <> Amazon).

Lastly, the business is all about power law, so these small exits outperform the remaining portfolio by orders of magnitude. I bet they are beyond excited with their returns.

Also consider that YC at the start had few companies per batch. Also a tonne of large acquisitions.

Amplitude and Gitlab will IPO soon, and MessageBird is a highly likely one as well.

An ipo isn't the only way to exit successfully.

Here's one of their more recent decks if anyone is interested: https://www.ginkgobioworks.com/wp-content/uploads/2021/08/20...

Is there any centralised place for finding interesting decks?

You'd think there would be a prolific Discord or telegram channel publishing interesting public or quasi-public documents?

Probably not...I just came across it as part of my diligence before investing. Originally found on Twitter.

As someone who works in the biotech space it’s still fuzzy to me what Gingko offers. Looking at their pitch deck I see partnerships with milestone payments across multiple industries agriculture, chemicals, bio security and now pharmaceuticals.

Does Gingko have a proprietary technology to offer or are they just a centralized platform?

I did notice their latest focus is pharmaceuticals where the huge margins are, but most biotechs will treat manufacturing as a patented process. So with Gingko just take royalties? If so there are plenty of other biotechs (probably many no one has heard of) that do this very successfully.

The business model is still not clear.

I would say they’re following Zymergen’s business model… except that model turned out to be “defrauding the investors.”

Another comment referenced this article which seems to suggest the valuation is based mostly on "promise".


I noticed they went public via SPAC, which, as an investor, screams red flag and scares me.

Can anyone shed light on why they would go this route? Is it accurate to say best case is because they wanted less hassle / quicker to market and worst case is that their financials/books are a disaster and they didn’t want anyone looking too closely before the founders raised money and cashed out?

Genuinely curious and would appreciate any insightful replies

Most of the answers here are wrong. The real reason is that when companies go public through a regular IPO, they can't show projected financials, only actual results.

Ginkgo has poor results so far, but huge projections, which a fair number of people believe. So, SPAC.

See this for example - https://www.ginkgobioworks.com/wp-content/uploads/2021/05/Gi... They had 18% revenue growth in 2020 but project 75%+ revenue growth through 2025. If you do a regular IPO, you can't post numbers like this

Their books don't look that good per this article: https://www.technologyreview.com/2021/08/24/1032308/is-ginkg...

I don't really understand SPACs. Is there a good article explaining what they do and why you take them instead of going public directly. And what happens to those SPAC shares now if you bought some?

Plenty of material on SPACs online, but per your question, the shares of the spac (SRNG) convert to the target (DNA). If you had units (SRNGU), you also got 1 share (DNA) + 1/5 warrant (DNA.W) per unit.

Was nice to have the ability to buy into SRNG early. This is more or less restricted to most through a traditional IPO.

Yeah, absolutely. Especially when in comparison with current IPOs. Their listings end up being "take the publicly stated IPO price, pick a random multiple between 1x and 3x, and that's what we'll actually drop onto the market at some unknown period of time during the day". Of course some people aren't happy about the SPAC structure - how else would they make their money?

Regular bankers dont want to IPO hard tech companies. SPACs are great for hard tech with future revenues.

What exactly is a "hard tech" company? And is this a recent change? Tech companies have been going public without issues for years until the last ~24 months when SPACs exploded (and mostly churn out negative returns after the initial pop [1])

Isn't a standard IPO also great for a tech company with future revenues as long as you believe in your business and future prospect?

Really trying to wrap my head around why a company would do this, and also why this isn't a huge red flag as well

[1] https://news.bloomberglaw.com/bloomberg-law-analysis/analysi...

It's not "hard tech" per se. Rather it's companies that are (essentially) pre-revenue and/or pre-product.

E.g. Ginko did $100m in rev in 2021 and is at a 20B market cap.

Why would a company do this? Simple: Money. Spac sponsors "guarantee" a ~20B market cap. Investment bankers in a regular IPO might offer $4-5B (still 50x sales).

So what's the difference? Spac sponsors are willing to take "venture" style risk, and traditional IPO underwriters are not.

Another way to think about this is: Traditional IPO underwrites are fairly risk adverse. They will value "high risk" companies in certain ways. E.g. How would you value a self driving company with 0 revenue? For bankers? pretty conservatively.

However the "market" has people that can and will value these companies more than IPO underwriters. Spac sponsors are essentially glorified "venture" style investments, that also happen to take the company public (and take a fairly large cut in return).

An alternative might be to have a "direct listing" without underwriters, however companies are unable to raise funds in a direct listing.

Umm. Spac management can "sell out" and gets coupons to buy stock so.. Does the SEC require the target company or the acquisition company file something akin to an S1 filing for the target company or ?

Isn't a SPAC just an empty shell? Why would they want to IPO that?

The SPAC sponsors burden the risk, not the bankers.

They are a great company and could have gone traditional IPO. However, with going SPAC they were able to bring 2 billion dollars into a company with super high valuation. They make less than 50mil and we’re valued at 18 to 20 billion. So don’t buy in now, you will have plenty of chance to buy this great company

Edit: Also just to add on by bringing in that 2 Billion dollars they have essentially secured the future of the company for a long time

That does seem bad.


> If you invest in a SPAC at the IPO stage, you are relying on the management team that formed the SPAC, often referred to as the sponsor(s), as the SPAC looks to acquire or combine with an operating company. That acquisition or combination is known as the initial business combination. A SPAC may identify in its IPO prospectus a specific industry or business that it will target as it seeks to combine with an operating company, but it is not obligated to pursue a target in the identified industry.

It's not bad per se, it's just how it works. Like pretty much everything in life the outcome is dependent on the people involved. You're not getting the potential for more upside without the introduction of more risk.

Chamath is currently leading four biotech SPACS: DNAA, DNAB, DNAC and DNAD, each with a stated target, neurology, oncology, organs & immunology. Anyone looking to invest in the SPAC today should consider the likelihood of this happening, the potential targets, and the sponsors history.

Or you can wait for an announcement around a proposed merger, even up to the day the official stock starts being traded.

Again, just depends on risk tolerance. It's nice to least have the option to take part in these deals.

SPACs are a great way to not have to hemorrhage IPO money to wall street bank cartels, and to lose billions w/ undervalued IPOs. I'm not sure what you're on about.

Please omit swipes from your posts to HN. Your comment would be fine without that last bit.


Congrats @jrkelly and team! Exciting day for synthetic biology, and love the pictures of the NYSE: https://twitter.com/Ginkgo/status/1438837881649381377?s=20

Serious question: How does YC work with companies like this?

It seems like a YC standard-form offer doesn't make any sense to a company like Ginko at the stage it entered YC.

Ha Tom knight is back

Robinhood currently has the Genentech description attached to Ginko Bioworks (DNA)!

First east coast YC company to IPO?

Congrats! Great to see this from inception in 2014 to news recently that they work with Moderna to scale synthetic DNA vaccine production to global demand. I like Part Deux of their revenue stream: royalties. Taking equity stakes in spin off bio-engineered consumer products. And the best part for a biotech startup, faster regulatory approval than pharma ;)

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