This is a huge amount by any standards, but for the relatively nascent field of synthetic biology, it is absolutely monumental because it provides definitive third-party validation of the tremendous commercial potential of the field.
Though the value of synthetic biology may seem obvious, there are other promising industries offering similar disruptive potential that have yet to reach such a high level of commercial success, nanotechnology being the most obvious example.
So, yesterday's news was one small step for man, one giant leap for mankind! :)
It is also significant in that it follows on the heels of Syngenta's deal, two weeks ago, to license (for an undisclosed amount) Chromatin, Inc.'s gene stacking technology for sugar cane (Chromatin is to plants, what Synthetic Genomics is to microbes).
Taken together, it appears that the field of synthetic biology is really beginning to gain commercial traction.
It will be interesting to see whether the Exxon-Synthetic Genomics deal launches a synthetic biology arms race as rival oil companies seek to align themselves with competing synthetic biology platforms.
It will also be interesting to see whether this unleashes what I refer to as a "Helen of Troy" phenomena (the face that launched a thousand ships), with the deal acting as a catalyst for broader investment in the field as a whole.
So, for example, will this deal stimulate the formation of hundreds of synthetic biology companies, like the success of Netscape encouraged the formation of hundreds of Internet companies during Web 1.0 or the success of YouTube encouraged the formation of hundreds of Web companies during Web 2.0?
At first glance, this would seem to make sense, however, the start-up costs associated with creating synthetic biology companies are orders of magnitude higher than their Web 2.0 brethren. This is due, in large part, to the tremendous back-end infrastructure necessary for scalably testing vast permutations and combinations of samples and for developing responsible product stewardship programs to address the very real concern of genetic containment.
In this regard, synthetic biology companies more closely resemble biotechnology companies than they do Internet companies.
So, lest news of Exxon's US$600 million investment tempt venture capitalists to fund hundreds of new synthetic biology companies, investors be forewarned: Synthetic Genomics more closely resembles a Google or Amazon, with their vast back-end infrastructures and domineering platforms, than a capital efficient Web 2.0 company.
[Disclosures: Synthetic Genomics is a Draper Fisher Jurvetson portfolio company. I am a shareholder of, and former consultant to Chromatin, Inc.]
