Edward Shenderovich of Synonym Biotechnologies
Edward Shenderovich is co-founder and CEO of Synonym Biotechnologies. Before Synonym, Edward was the Executive Chairman and co-founder of Knotel, a leading flexible office company (acquired by Newmark), founding and managing partner of Kite Ventures, a global venture investment company, and a founding executive of SUP Media, where he oversaw the company’s strategic development, including the rollout of LiveJournal globally. Previously, he was a co-founder and CEO of Quantum Art, a content management software provider, and a co-founder of Merchantry, a New York-based provider of online marketplace infrastructure (acquired by Tradeshift). Edward has served on the boards of directors of a number of successful companies, including Tradeshift, Delivery Hero, Plated, Domo, and others. He started his career as an Industry Analyst at Silicon Valley Bank. Edward is a graduate of UC Berkeley and a Fellow at Universita Cattolica del Sacro Cuore.
Check out Capacitor, The free worldwide database of biomanufacturing capacity at https://capacitor.bio/
Thanks for joining us on the Cultured Meat and Future Food Show. We’re excited to have Edward Shenderovich, the co-founder, and CEO of Synonym Bio Technologies on the show today. Before Synonym, Edward was the executive chairman and co-founder of Nodal, a leading flexible office company acquired by Numark, founding and managing partner of Kite Ventures, a global venture investment company, and founding executive of S u P Media, where he oversaw the company’s strategic development, including the rollout of Live Journal globally. Previously, he was the co-founder and c e o of Quantum Art, a content management software provider, and a co-founder of Merchant Tree, a New York based provider of online marketplace infrastructure acquired by Tradeshift. Edward has served on the boards of directors of numerous successful companies, including Tradeshift, delivery Hero, played Domo and others. He started his career as an industry analyst at Silicon Valley Bank and is a graduate of uc, Berkeley. Edward, I’m really excited to have you on the show. I’d like to welcome you
Alex. Thank you very much for having me here. I’m very excited to be on the show. I’ve listened to a number of episodes with many of my colleagues, and glad you took the time to speak.
Excellent. We’re glad to have you here. Edward, tell us a little bit about your background.
I was born in Russia. We’re actually in the Soviet Union, and then my parents immigrated in the nineties actually in 1990 before the Soviet Union collapsed. I grew up in California and I I had a math background. I was a math wiz when I was a child, and was always a sucker for problem solving. Spent countless, countless hours on different puzzles, and I guess I just, like most people, I was driven by the dopamine release and craving that you get from the puzzles coming together. I think I’m I’m still into solving puzzles, so that I guess that, that that’s led me to become an entrepreneur and then an investor. And they’ve straddled those worlds for more than 20 years now. At first, I I worked on smaller problems.
I started my first company almost right off out of college in late nineties. It was an internet software business ultimately not a huge success, but it helped me realize that I need to learn more about the space. I joined Silicon Valley Bank and became its first internet analyst. Then started another internet software company, which did better. We were making content management solutions and had two markets. First was local government, which needed applications for communicating with different constituencies from tax assessment and collection to payment of parking tickets. And the second company the second part of that company was e-commerce product management. And we became super skilled in that space and ultimately partnered with Amazon to build a few applications for their newly formed marketplace business. And through that I learned a lot about the food market, because that was one of the categories we launched together.
That company is called Merchant Tree, or was called Merchanting. It was acquired by Tradeshift, which is San Francisco based electronic invoicing and supply chain giant, and it’s still a part of their procurement platform. In there were a few other adventures. And then in 2009, I started a venture investment company called Kite Ventures. We had this novel idea of partnering with entrepreneurs early and becoming their corb dev team and fundraising engine. And that way we partnered with delivery Hero, which was just a PowerPoint at the time. And ultimately became one of the leading food tech companies in the world. And now employees, 50,000 people is present in over a hundred countries not very well known in the US because they simply don’t, don’t have a business in the us.
But they are sort of a, started as DoorDash and then expanded into lots of other categories. They’re probably the leading quick commerce company in the world. And and then I I spent a lot of time in Europe, came back to the States and settled in New York in 2012, partnered with the team at Plated where I letter co-led every round in that the company had raised had great, it was a great ride. And then the company was acquired by Albertsons. And through those experiences in in food tech, I learned a lot about the food business and the supply chains and related problems, like how, how is meat bought at scale? How do you actually, how do grocers get meat on the shelves? How does a company like plated, which was a meal kit business look at its supply chains and Ford contracts.
And I realized that it’s a market of like food in general is a market of that, that’s characterized by tremendous waste. And that’s something that needs to be fixed. And for years, I’ve been thinking about a way to, to address this. And then really only recently, a couple years ago, stumbled on synthetic biology and cultivation as a platform for addressing the problems of climate change to climate change that are caused by animal agriculture and the inefficiencies in the in our food supply chains. And I started looking at various sy bio companies, which ultimately led me to founding synonym.
I would like to emphasize the word that you used platform, and we’ll dive into that a little bit deeper. But I wanted to ask you over the last decade, and, and it seemed like you got started just around the time of the.com boom, is that right?
Yeah, yeah, it was it was actually the yes, the first company I started was in 97. And it was a, it was a quick ride. And then when I joined Silicon Valley Bank in 98 it was it was email@example.com and Silicon Valley Banks is still a litmus test for me for, for the performance of the industry.
So just generally speaking, the changes in the tech atmosphere since then, what have you seen?
Well I, I think that’s I, I would, I would almost say that it’s a different conversation. Obviously the industry has become significantly larger and there what happened in the nineties is that from from just a few companies in, in Silicon Valley and a smaller number of venture funds, this industry has really mushroomed into into one of the key drivers of economic growth and wealth over the last several decades. And I think that right now is actually pivotal moment in in the development of the, of venture space and of Silicon Valley, because this is a moment when Silicon Valley is starting to pay attention to the real world. For the last few decades, we were so enthused by the idea of virtualizing and living in a digital world and, and the metaverse and ultimately developing the crypto economy that the best minds in the world neglected large problems like climate change and infrastructure and animal agriculture.
And I think right now we’re seeing a really big pivot to, to these real world problems. And I I think that’s that’s a great change. We’re still at the, in the early stages of this I think most venture investors are still fascinated with SaaS and there’s been a lot of wealth creation attributed to SaaS, but ultimately, I think there will be more capital over the next decades going to more important problems than determining which advertising to show to a particular user of a website.
Love that answer, and totally can imagine that this could be a <laugh> a very separate episode within itself. But coming back to synonym, tell us about what it is at, at a high level, and kind of as we get into this idea of a development platform.
So, at a high level, the idea behind synonym is that in the bio-manufacturing infrastructure, just like in many other asset classes, ownership and usage should be separated. Companies that are developing synthetic biology technologies or products are not specialists in the manufacturing infrastructure, and they should focus their, their resources on refining their signs and commercialization rather than building large scale facilities. It’s also not the right use for the venture dollars. And what synonym is tackling, or one of the problems that synonym is tackling is a problem of capital efficiency. So we want to separate ownership and usage in bio-manufacturing infrastructure, and have the right types of capital be applied to the right types of problems.
Is your team also working on developing new technologies within these facilities, or is it more of acquiring the facilities and essentially leasing them out? Is is that a a good way to explain it?
So I, I think that they need to be built in the right way. There are some companies that are working on new bioreactors and new downstream approaches that will take years to develop and years to come to the market. Some companies are working on new bioreactors for cultivation, like arc. Some are working on new, better, more productive precision fermentation reactors. But before they come to market and before they can be they, they can be introduced at very large scale, at half a million liter scale. These facilities still need to be built, and they need to be built in a way where you are optimizing for power consumption and water usage and you have the right platform for waste management, where you also need to operate these facilities in a, in a way that optimizes human flows inside and the number of people that actually need to be in a facility.
So in a, in addition to having the right technology inside, you also need to have the right corn shell, and that’s a part of this biomanufacturing infrastructure asset class. So you need to have a holistic view of not only the bioreactors that you’re using, but also the, how, how the whole facility comes together and how it’s being financed and what, what, what is the techno economic analysis that matches the company that wants to use that capacity and the capacity itself. So we’re focusing on the design of the facility with with the idea of of having the right tech economic analysis behind it. And then we would work with developers and we would work with different financial institutions, including banks, on actually financing them. But we want to make sure that we minimize costs and minimize risks for for the two sides of the equation, for companies that need facilities, for for producing things that they’ve been making in labs and financial institutions that want to deploy that capital into this new asset class.
Excellent. Okay. So in, in many ways, you’re seeing that this, there’s this huge boom similar to how there was a big boom in tech and need for databases and servers at that time, Googles and Facebooks were building their own facilities, but when we’re looking at Send Bio or maybe, you know, cultured meat and precision fermentation, you know, these companies, they need actually, let’s say, server space before they blow up, right? And so this is a way for them to access these facilities before they can start generating a larger amounts of revenue.
Yes, actually, same, same with data centers. They’re Amazon and Google and Facebook actually lease lots of data center space from other companies. And they’re then data centers are a trillion dollar asset class that’s split across many different pockets. But there are companies like Equinix which is very sizable, publicly held business which is probably the largest player in the data center space. And they’ve had 78 quarters of consecutive revenue and growth and profitability which is, which tells you about the stability of that asset and and the market need. And, and we hope to build a similar type of business, maybe more capital efficient but in the in the buy manufacturing infrastructure space.
And so what kinds of companies would use these facilities, or what kinds of companies would work with synonym?
So we are primarily looking at two applications across one. One is foods precision fermented proteins and lipids. And the other one is biomaterials various forms of bioplastics, preservatives, surfactants, and other other stuff that will replace plastics or different benzo compounds.
What level of scale does your team get involved at?
Yeah, so we we’re actually, we’re actually looking at at manufacturing. So scale of the total facility size in millions of leaders. So the companies that we’re talking to about about using our capacity are companies that have already Al Al already tested their strains at 50,000 or a hundred thousand liter scale and are ready to commercialize. So we at this point, we’re not providing pilot scale capacity or demo scale capacity. We want to help companies really scale and commercialize. And we we recently launched this online database a directory of all available pilot and demo capacity just to show that there’s not enough capacity in the world. And it, it’s called, it’s at capacitor.buy. I’m I mean, probably doing your research before this call. You’ve seen it. And it has been of tremendous help to many companies. We’re we’re getting love letters from the industry about this database because it’s not something that has existed before. And we want to show that there should be more dots on the map. There’s not enough capacity for this industry. There’s been 15 billion invested in Send Bio over the last decade. And there are very few companies that are producing at scale. This needs to change.
And definitely for those listening, we’ll put the link in the show notes for capacitor. And I think for me, what even was a little bit more direct and to the point was a, a small graphic on the synonym.bio website is that there’s this graphic that says, existing supply, tens of millions of leaders, and then future demand tens of billions of leaders, right? And, and I think I was talking to, I think it was Paul Shapiro, and he had mentioned that if you took all of the bios that are operating today and you use them for alternative protein production, you still wouldn’t even reach 1% of demand. And so I think that little graphic there is definitely something that really highlights the need for, for something like this.
Yeah, totally. It’s we will need a lot more capacity. And that graphic is probably, that graphic is I think the need for capacity by 2030, and imagine how far it will go from there.
When we think about approaching that challenge and, and building something that perhaps we haven’t established yet, a lot of these facilities are much smaller. How do you envision that your team will actually grow, right? Even now, we, we do see that lead times for even just getting smaller tanks is quite difficult. So I guess the question is, is it something that you believe will require more innovation, or is it just a matter of getting it done?
I I think there’s a lot of innovation that goes into actually designing these facilities. So overall, I, I would say that the design and reusability of biomanufacturing infrastructure will be one of the key factors in driving the growth and success of the industry. As the demand for biomanufacturing good continue, goods continues to rise these facilities will need to be flexible and efficient and sustainable. And capturing all three is capturing all three requires a lot of innovation. So the innovation may not be just in bioreactor design or downstream design, but in how these facilities are organized what power you are using, and how and where that power is located how much water is actually being driven for the facility and what happens to that water. Things like better air compressors that that we need for pushing air into the bioreactors.
So there, there’s a lot of innovation that needs to happen. It’s a complex product. It’s like it’s, it’s not that different from making spaceship. It, we, we need the best minds in the world working on on, on designing these facilities. And our team will grow in terms of engineering talent when we’re looking for mechanical and industrial and structural engineers to take on this challenge. In addition to by processing engineers, obviously we we need to understand how to best develop these facilities and what the relationships with equipment procurement construction companies should be. How do, how do you actually streamline the supply chain and make it most resilient? So that we shorten the lead times for key components. And and then equally important is this techn economic analysis and underwriting the facilities for the right customers in the right place.
And minimizing risk for third party investors that need to come in that ultimately should be the owners of these facilities. The whole thesis behind synonym, our, our core belief is that we need to separate ownership from usage in biomanufacturing infrastructure in order for the industry to scale. Companies that are working on precision fermentation or cultivation should not be building their own facilities. They should not be designing them. It’s not their core expertise. They should use the venture dollars that they raise for the specific purpose of refining their signs and and commercializing their their products. Not for, not, not in developing the expertise in building facilities. And we want to develop that expertise.
I love that. And I think for me, that hits the nail on the head on the whole entire financing aspect of it. And I think it definitely makes sense, and it’s a need that you even said it yourself. We’re gonna get to a point where we’re, we’re gonna need this capacity very fast, and the way we’re going about it now, we’re not gonna get there.
I absolutely agree. I mean, you are preaching to the converted.
I wanted to ask you, for those that are listening in, the audience that are either working as researchers or in academia or maybe thinking about starting a startup in either the, the future food or biomaterials space, what advice do you have for them?
Well, I, I think that we are working on very important problems and we, we certainly need the best minds in the world focusing on the buy economy because it holds tremendous promise both for the world and for the individuals that dedicate their lives to it. I think that I, I’ve been reflecting a lot given the recent events with ftx. I’ve been reflecting a lot on why things like that happen. And and Theranos is a, is also a good example of of this. But we, we live in a world where winning is an important factor for defining success. And we like winning. We, we get dopamine release from that. I like winning. Everyone does. We like solving puzzles. We like when these puzzles come together.
But winning and success don’t always go hand in hand. I, I think they, what, what I should say, really is that they don’t always equal each other. Winning an argument may not bode well for having a successful relationship, both at home and at work. If you are building a team, whether it’s football team or or a group of colleagues that are working on new byproducts, success is not a single person winning, not even the team taking the first place. I think that success is team cohesion with optimal performance over many seasons. And as a, as an entrepreneur and as a, as a CEO of the company, I think my, my job is to formulate the vision and be the curator of of, of the company’s vision to make sure that the company is well financed that we are able to bring the right people to the table. And that there’s that cohesion among the team, that there’s transparency and clarity that communications are have the highest level of fidelity and and that by itself holds people accountable not just to the company, but to each other. And I think that that for me would be the definition of success for any entrepreneur. It’s creating teams with the highest level of cohesion, because if you have the right team going after a large market that’s ready for, for innovation, that team will succeed.
I like that. And very inspiring words for those that are listening. Edward, thank you so much for being on the show. You could get in touch with Edward on LinkedIn and learn more about firstname.lastname@example.org. Edward, do you have any last insights for our listeners today?
I, I would suggest we all spend more time thinking about by economy in broader terms than just cultivated meat or just precision fermentation in broader terms than just food or materials. All these things are tied and ultimately we want to live in the world that is defined by sustainability. And the more we can do to further that the more thankful the next generations will be to us.
Thank you so much. This is your host, Alex Edward. I wanna say thank you again for being on the show.
Thank you very much, Alex. It’s been an absolute pleasure.
We look forward to seeing everyone on the next episode.