Orr Yarkoni raised $46M for Colorifix to create sustainable dyes using synthetic biology. The discussion includes scaling production from kilos to tons.
Orr Yarkoni raised $46M for Colorifix to create sustainable dyes using synthetic biology. The discussion includes scaling production from kilos to tons and strategic versus VC funding, implying a later stage of fundraising beyond Series A.
You're going to have to be a lot more patient with everything, including yourself, to make this work. [music] All righty. Hello everyone and welcome to the Dealmaker Show. So, today we have an amazing guest, you know, joining us. you know, we're going to be talking quite a bit about barriers to entry, scaling up versus numbering up, you know, which is quite a unique topic. Uh, and then also the the fundraising process, you know, whether you're raising from VCs, the strategics, you know, the angles, the perspectives, the roles, uh, building, scaling, financing, all the good stuff that we like to hear. But without further ado, let's welcome our guest today or Jarone. Welcome to the show. >> Pleasure to be here, Alejandra. So, originally born in Israel, but then you know you you kind of like moved a little bit all over the place, Portugal, the UK. Give us a walk through memory lane.
How was life growing up for you? >> So, as you said, I was born in Israel. When I was very young, uh two years of age, my parents moved to Portugal where they raised me and my sister. Um at age 18 I moved to the UK for the university and I ended up doing my undergraduate through PhD in the UK in Newcastle and uh then moved on to Cambridge where I did my posttock and met my co-founder Jim Aioa. >> So tell us about the whole research and more like the technical side you know of you. How did you get into this whole you know segment to begin with? So I was always very passionate about nature and uh particularly living things from an early age. I always loved animals and when I got into my teens I really committed that I wanted to get to understand nature better and particularly nature's language which is DNA and that's what made me go into molecular biology and then synthetic
biology and understanding how to work with nature's own processes to make things. Um then I worked on interfacing cells in the environment through bio sensors for a number of years which is how I met my co-founder Jim working on a bio sensor for water quality and through that work we became aware of how much impact the textile industry actually has on the environment particularly on water and pollution and we decided how it would be great to use Symbio to actually make the colors and put color on fabrics uh rather than measure how much pollution is going into the water to begin with. >> So how big of a of a decision was that? Because I mean up until that point you were pretty much academia researching PhD you know all of that good stuff. So it's quite a shift you know from that to wanting to start a business. >> Yeah I mean not going to say it was easy. Um, it was a difficult
decision, but one of the learnings for me from the work with bio sensors was that we were developing products that were really good and they were fit for purpose, but they didn't really have a market, meaning there was no financial incentive to do it. So, we were making really lowcost sensors to help people monitor the quality of their water, but no one was going to make money by selling those things. And that really drove me that for the to the realization that to do good, you must also do well. And for something to be sustainable, it has to be financially sustainable, not just environmentally sustainable, right? And that was one of the big drivers to go into actually to go into business and to go shift mindset from academia and developing products that were for a good purpose to de to developing a product that solves a problem and does so in a way that perpetuates its impact on the
environment meaning people earn money doing it. And what about the whole journey of um putting together the technology you know for what end up becoming you know the company but then spinning it out and going at it with building it. I mean what what does that journey look like? >> Uh again it's very much step by step and it requires different levels of commitment from you and from those around you because ultimately it's going to be very seldom that you can achieve that much by yourself. So it starts with surrounding yourselves with yourself with the right people. Um and again very thankful for my co-founder to help me and guide me through some of the steps and to give me the opportunity to step up and be the CEO as he was used to be my boss. You have to keep that in mind. Um but from there understanding what it means to run a company. um in my case reading the UK companies act
2006 and understanding all the obligations of being a director and all those things and essentially I approached it from a perspective of I'm doing research just not into science I'm learning how to do those things so it requires that commitment to understand your role what's expected of you and how you can best serve the company in that role and then from there we made a few mistakes I'd say the first one was once we had the technology down and we filed for the patent and got the search examiner report we're like okay we have a technology now we need investors and what you should be doing is okay now we have a minimum value proposition now we need to find a test it with the customer so that took us a little bit of time to get that in place which is why the company started 2016 it took us time to get that first funding was you know learning the ropes of being a first- time entrepreneur
setting up the company running it and uh eventually getting that customer and eventually investor traction. So for color fix you know so that people get it what ended up becoming the company I mean how what's the business model >> so what we do is we modify microorganisms to produce uh colorants dye stuffs for use in textiles um we basically make them to make the same colors you see in nature so if you take a parrot for instance we could find DNA off the tail end of the parrot uh and from there find the message make that color put into our microorganisms will make the same color the parrot makes the same way that the parrot makes it starting from sugar and nitrogen and building all of the chemistry. We then ferment that micro like the way you make beer but instead of making alcohol, you're making the the dye stuffs. And then we apply all of that mixture, the biomass, dye stuff and
water from fermentation onto the fabric. And the microbes transfer and fix the dyes into the fabric. So not only you're replacing how the dyes are being made, you're changing how they're being put on the fabric and removing all of the chemistry that's normally associated with dying. And that allows you to save 77% on water, um upward of 30% on emissions, and depending on what you're dying, between 19 and 50% on energy. >> And then when you guys were putting together the business, you know, what were some of the biggest barriers, you know, to entry that that you were encountering? >> Well, firstly, it's a GM technology to begin with. So the process we're talking about is a GMO process that makes a non-GM product. That means anywhere that we're applying it, we need to get a local license and work with local governments. And in some countries, particularly in the EU, you're
looking at about 45 days turnaround from applying for a license to getting it. Somewhere like Turkey, can take up to 270 days for that application to go through. So every time we onboard a customer towards using the process, you have to engage in that long regulatory cycle and navigating that the first time around and getting a successful application through isn't simple as there aren't many applications for distributed sio really in the world. Uh so that was the first one. Second one, setting up everything for scaling um and getting these processes to take place in a diehouse that to make use of all the existing labor and infrastructure and processes that's uh in place at the customer side. We need to standardize uh a lot of elements there and simplify them for use by non-fermentation scientists. Right? We want people who are machine operators to use this equipment and achieve
consistent reproducible results. >> So then when it comes to really putting together the proof of concept, you know, how was that like and and at what point do you guys feel like you're starting to turn a corner and that this could be something something interesting. >> So in different stages of growth, we had different key growth milestones. So, the proof of concept towards starting the company got when we managed to dye our first like reasonable piece of fabric and have it soak all of the color out of the liquid and the liquid was was totally clear. And then that's where we went, okay, this this really works. Then, um, the next one was, okay, we got it to work and pass all the quality metrics and safety metrics and everything else. So like okay this this is able to enter the market. Okay so proving that is something that you can eventually sell once you scale and etc. That
was another one. Then…