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Investing in the microbiome – a look back into the future

Microbiome Futures Roadmap

With 2017 now in the rear-mirror, it is a good time to assess the investment landscape in the microbiome space and try to identify relevant trends indicative of where microbiome science and the industry might be headed next. To do this I contacted Matt Martin, Microbiome Innovation and Ventures Lead at the University of Chicago. Matt has been analyzing the space for some time now, and in collaboration with Michael Lohmeier, a student at the Tepper School of Business, Carnegie Mellon University, has kept a tab on companies and investors alike.

Here are a few outtakes from this comprehensive data set.

Since 2010, short of $1.8 billion of venture investment (seed through Series C) have poured into the microbiome space, about 60% of it ($1.0 billion) in 2016 and 2017 alone. Of the four areas the money has streamed into, therapeutics has led the pack with an average of ~61% of all investments, followed by diagnostics at ~18%, agricultural applications at ~12%, and consumer products at ~9% (see Venture Investment in the Microbiome Space).

Top investors during the same period of 2010-2017 include Seventure Partners (15 rounds), Flagship Pioneering (10 rounds), OrbiMed Advisors (8 rounds), Alexandria (8 rounds), and tied at 6 rounds, Illumina Accelerator, Johnson & Johnson Innovation, and Monsanto Growth Ventures.

With the exception of Monsanto, which predictably focuses all its investments on agricultural applications, the top investors have accrued diversified investment strategies across different areas (see Top Investors in the Microbiome Space (2010-2017).

Seventure, through its microbiome-directed Health for Life Capital fund, boasts the largest and most diverse portfolio of microbiome companies in the therapeutic, diagnostic and consumer good spaces.

Corporate investors Illumina and J&J both project their corporate strategic interests onto their portfolios by focusing, respectively, on DNA-related diagnostics and on breakthrough therapeutics.

And Flagship, OrbiMed and Alexandria focus on their respective strategic investment goals – human therapies and agricultural breakthroughs in the case of Flagship, and human-oriented therapeutics and diagnostics in the case of OrbiMed and Alexandria.

Of the 131 companies on the receiving end of the microbiome venture investment capital worldwide, the bulk (103) is headquartered in the USA. France comes in a distant second with six companies, followed by Canada and the UK, tied at four companies each. A number of other countries across Europe, Asia and North Africa are also represented (see Global Microbiome Venture Investment Distribution).

Within the USA, the distribution of microbiome companies receiving venture funding is highly skewed toward the coastal states, with California and Massachusetts topping the list at 40 and 25 companies, respectively. North Carolina clocks in at a respectable seven companies that have benefited from venture funding, followed by Connecticut, Maryland and New York, all tied at four companies each (see Microbiome Venture Investment Distribution in the USA).

Three Massachusetts-based companies stood out in 2016 and 2017 period for the size of the funds they raised in a single round. Small molecule company Kaleido Biosciences raised $65 million in a series A round underwritten by Flagship. And two companies raised $50 million each: ‘monoclonal microbials’ company Evelo Biosciences in a series B round underwritten by Alexandria, Celgene, Flagship, Google Ventures, and Mayo Clinic Ventures, and bacterial consortia therapeutics company Vedanta Biosciences in a venture round underwritten by Invesco, PureTech, Rock Springs Capital, and Seventure.

With therapeutics and diagnostics accounting for almost two-thirds of all investments in the space, I thought it would be interesting to have a closer look at how venture investment is partitioned across the funding cycle in these two areas given their interdependence and their peculiarities vis-á-vis agricultural applications or consumer goods.

Since 2013, the number of early investment rounds in microbiome companies (seed and series A funding) has followed a clear upward trend that has helped fuel innovation in the space. And consequently, from 2014 on we also observe an increase in series B and series C funding rounds, a sign that development programs are progressing smoothly (see Investments by Round (Therapeutics & Diagnostics)).

These trends hold steady when analyzing total investment volumes, with series A through C funding rounds dwarfing seed funding by a factor of about 20.

There is a lot more that can be extracted from these data, but the overall picture seems to be one of solid investment trends pointing in the right direction for further progress in the microbiome space in 2018 and beyond.

Microbiome Futures 2018-Global Engage

Gaspar Taroncher-Oldenburg is Consultant-in-Residence for Global Engage. He was previously Founding and Managing Editor of Nature’s SciBX: Science-Business eXchange (now BioCentury Innovations) and scientific editor of Nature Biotechnology.


This article was produced in the buildup to Microbiome Futures to lay out the roadmap for the future of microbiome translation. To read the full report from this one-off landmark forum, click here to download


One Response to “Investing in the microbiome – a look back into the future”

  1. Anthony D. Sabatelli

    Mr. Taroncher-Oldenburg, Very good article. I am a patent attorney practicing in the life sciences, including the microbiome. You probably had seen the Sept. 18, 2016 Wall Street Journal piece with their data. You have a nice breakout by sector. Do you have 2018 data yet, particularly for your first graph. I am presenting a talk at a microbiome conference in March and would like to use your first graph (or an updated 2018) version. Of course, I would give you a citation credit. Thank you, Anthony D. Sabatelli, PhD, JD


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