The New Cold War: Why Biotech Is National Defense

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  Speaker 1: So what if you could invest in the biotech companies that are strengthening America’s national security against emerging biological threats and you didn’t need defense industry connections or even government clearance to back these strategically vital startups? You’re going to learn today how biotechnology has become the new frontline in global competition where China has already invested for 20 plus years while building the world’s largest DNA database. Alumni Ventures is backing founders across brain computer interfaces, AI driven drug design, and modular biomanufacturing technologies projected to grow into multi-billion dollar markets by 2030. Investing in America’s biodefense isn’t just smart portfolio diversification. It’s about ensuring US leadership and health defense and the economy while potentially generating significant returns. As the $5 trillion bio economy continues its rapid growth. Now let’s hand this off to Drew Wandzilak. Drew, take us away.

  Speaker 2:
  Welcome everyone. I am thrilled to have you with us today for a conversation that I believe is both urgent and underappreciated: the rise of biotechnology as a pillar of national security. I’m Drew Wandzilak. I’m a senior associate here at Alumni Ventures and I’m also part of our US Strategic Technology Fund. Today we’re going to explore why biology is no longer just about healthcare or treating sickness or disease, but it’s about power—why molecules, cells, and code are shaping the next generation of global competition. This is about the bio revolution and why America, more particularly, must lead it.

  Now, before we get into the kind of meat and potatoes of the presentation, just a few housekeeping notes. A reminder that this presentation is for, excuse me, information purposes only and is not intended as an offer to sell securities or the solicitation of an offer to buy securities. If you want to learn more about these disclosures, you can go to avfunds.com/disclosures.

  Brief little agenda of what we’re going to go over today: we’re going to talk a little bit about Alumni Ventures, who we are. We’ll talk about why biosecurity, why this broader trend of biology and national security. And then we’re going to go into this thesis that we’re calling Defying Darwin. And then finally, we’ll wrap up with a little bit more information on what is our role and what are we doing in this space already today. And then we’ll wrap things up with some ways that you can get involved.

   

  I’ll keep this brief. I grew up about 30 minutes south of Charlotte, North Carolina. I joined Alumni Ventures about eight years ago and about six years ago really stepped into a full-time investing capacity across a number of our different funds. I’m the lead investor on companies like Asher, Mechanica, Alo, Atomics, and Impulse Space, based here in our Chicago office of Alumni Ventures.

  So Alumni Ventures—some of you watching have heard of us, some of you, maybe this is your first time meeting us or seeing information from us—welcome. A little snapshot on us: we started back in 2014 with this mission to democratize the asset class that is venture. We’ve raised over $1.4 billion from over 11,000 individuals that have invested in that capital. We have invested that capital back into about 1,600 portfolio companies. We’re one of the most active venture firms globally and the largest firm in the US for individuals.

  As I mentioned, I’m here in our Chicago office, but we also have our headquarters in Southern New Hampshire, in Manchester. We have offices in Boston and New York and Menlo Park as well. So in all of these kind of thriving and strong entrepreneurial ecosystems.

  So why this conversation and why are we having this now? It’s really because we’re entering this really interesting place in biology where we’re seeing advances in artificial intelligence and AI. We’re seeing synthetic biology and genetic engineering moving faster than many policymakers, investors, and technologists really realize. And the speed and scale of this innovation is happening at a really breakneck pace.

  COVID was a bit of a warning shot here. It exposed, I think in many ways, how brittle our global supply chains can be and then ultimately how central biology is—and understanding biology—how important that is in everything from national defense to, in the case of COVID, economic resilience. So this wasn’t just a health event, it was really this system shock to the global economy. And that next wave of kind of what’s next—as we think about it—some of that is already here, and a lot of that is going to look very different than what we saw. But those same kind of core internal truths remain true.

  The other bit of an elephant in the room here is the strategic element. So I mentioned we’ll talk about obviously the national security component of this. China has been running a national biotech strategy for over two decades now.

  We recently hosted an event—we’ll get into a little bit more later—where we kind of started touching on these topics of the convergence of biotechnology and national security. And one of the things that one of the speakers said was, we need a Manhattan Project level of coordination between the public and private sectors here in the US to compete with what’s happening in the world. And I think a really great way to describe what China has been doing over the last few decades is really approaching that Manhattan Project level of coordination at a national level. They’re building some of the world’s largest genomic databases. They’re dominating production of key biomanufacturing inputs. They’re integrating synthetic biology and AI to create asymmetric defense and economic capabilities.

  And I think they’ve really made it clear that this is not just a scientific frontier, but it is a geopolitical priority for them. And we need to think the same way. We in the US have really strong leadership in biotech innovation, but we are starting to risk falling behind here if we don’t control the supply chains and if we’re not more of a leading voice in what we’re calling the global bioeconomy. And just a reminder, this is not competition in the abstract. This is about who controls the biological future. And we believe that’s a very big piece of what our future looks like.

  Always good to put some numbers on this. So we’ll kind of consider this the bioeconomy more broadly—things like bioprocessing, gene editing, PCR, other technologies. This is about a $5 trillion market. The US bioeconomy already accounts for about 5% of our GDP. Synthetic biology alone is projected to hit about $5.3 trillion globally by 2040. Again, for scale, that’s bigger than the US defense budget, bigger than the semiconductor industry, and it’s growing at a pretty fast rate.

  The explosion of other technologies that are kind of in this purple “other” category you see on the chart on the right, I think, are also probably going to grow. This chart might be a bit of an underestimation. Even things in personalized health, neurotechnology, wearables—these are all markets that are projected to surpass $600 billion by 2030. And these aren’t niche sectors. This is becoming the new backbone of the modern economy.

  Jumping back into this lane—this is obviously what’s important to us at the Strategic Technology Fund—is the national security component. And so I just want to lay out the shift that we all need to understand here. Biosecurity in many ways is becoming a new form of cybersecurity. It’s dynamic, it’s asymmetric, and it’s really critical across industries.

  We think of biotech happening primarily in a lab or in drug development, but this is something that touches everything across genomics and genes, to food and agriculture, to, of course, human and personal health. The DOD, Department of Defense, DARPA—they’re all investing in battlefield-ready biotech: rapid diagnostics, portable vaccine production, biosurveillance platforms.

  And then perhaps more recently—you may have seen in the news—the National Security Commission (Senate Commission, excuse me) on Emerging Biotechnology was a commission that was spun up to really focus on these threats related to biotechnology. They released their final report a few weeks ago talking about how this is an area that will drive the next wave of innovation. And so we need to make sure we’re well positioned. The tools of power are not just military hardware but truly becoming cellular, molecular, and programmable.

   

  So this is what we’re calling our Defying Darwin thesis—human performance at the edge. What does that mean? So Darwin’s theory of natural selection, evolution of species—we’re starting to see technologies, again harnessing, controlling biology, making it programmable—that are actually flipping some of these concepts on their head. Actually looking to improve human performance. Go against, hack, defy Darwin. And this may be unsettling, that biology can be hacked and enhanced and optimized, but it’s happening today.

  And so we need to think about how we can do this thoughtfully, how we can do this ethically, and how we can do this and make sure the leaders of this technology are using it in the right way. This could be anything from brain computer interfaces, cognitive enhancers, genetic resilience. We’re entering this world where warfighters, workers, civilians can be augmented—and it’s no longer science fiction.

  Companies like Synchron are doing FDA-approved human trials for brain computer interfaces. There are companies out there like Superpower that are building consumer testing neurotech platforms, and the defense sector is eyeing cognitive enhancement as a strategic advantage. So there’s obviously base-level examples of this—of warfighters that can run faster, jump higher—but then there’s also healing effects, right? There’s different tools and biological solutions to treating things like PTSD.

  And so our ability to really harness and control biology in new ways, again with the rise of synthetic biology, with the rise of AI, is shifting some of this national strength into some really powerful places.

  I wanted to get into a few areas I’ve touched on a little bit already. A couple just broad stroke technology areas that we are tracking. One of those is brain computer interfaces. As I mentioned, this is about a $2 billion market today, expected to hit about $9 billion by the early 2030s. It’s about thought-controlled devices, yes, but also kind of direct command systems for defense, health, and communication. So really closing that gap between the digital world and our biological world in a real sense—being able to control systems, control actions, objects with brainwaves, with our mind.

  The second area we’re looking at is a little bit more what we think of as traditional biotech, but is kind of being transformed and reimagined with AI—and that’s AI-driven drug discovery. There are a number of factors that go into developing a new drug. We have to understand the impact of that drug on the body, and that means that there are billions, if not trillions, of different interactions that we essentially have to map and account for. And so the rise of AI has really kind of put this model on its head in how quickly we can discover, simulate, and test new drugs.

  The third pillar here is what I’m really excited about. I think of this truly as kind of a really core pillar of when we think about the future of the bioeconomy, we think about the future of biosecurity and biodefense—is modular biomanufacturing. So these are resilient, kind of regional production hubs that can deliver vaccines, biofuels, materials on demand. Also, reimagining and thinking in new ways about how we’re developing the core ingredients that go into new biological materials or new biological processes to create materials that we know exist today.

  We’ll get into some examples here in a second, but I think of this in terms of—we probably remember some of the stories of lab-grown meat and being able to create food in a lab. There’s a lot of inputs that go into that process, and so we need to think about—if that’s actually going to be a scalable part of our economy—how are we effectively building out the supply chains for that?

  This is a venture story. I think there’s a component here that we talk about—the national security imperative coming at the public level, at the government level—and that’s certainly true. But there has to be this component of innovation that comes from the private sector, and we’re seeing that component really building very strongly at the earlier stages with venture-backed companies. They’re just building the infrastructure here much faster than governments are, and many of these companies are thinking about things in a very dual-use way—so selling to both government and commercial.

  Again, early-stage, seed, Series A. I think of companies like Acorn, which is building a nanopore solid-state gene sequencer—so kind of the smartphone of gene sequencing—making it really easy to do full genome sequencing for humans eventually. But in the near term, things like applications in food and agriculture—being able to test for different pathogens or diseases or components in a batch of food.

  Ron—we touched on the brain computer interface world. Pilgrim is building biotech solutions purely for defense applications. Haifa is looking at—how do we actually create feedstock for biomanufacturing using waste byproducts that currently exist in food production?

  So one of the things they started on very early was—the wastewater that was coming out of food production facilities needed to be treated, needed to be shipped away. Very expensive, arguably very wasteful, and it was not easily bottled up and sold as water in the store. But it was nutrient-rich water that could be used for things like feedstock, which is a big kind of limiting piece of the supply chain for a lot of companies building in the fermented or lab-grown space.

  One of the cooler ones on here is a company called Osmo. So they are literally digitizing scent. And why that is a big deal—because the sense of smell is perhaps our most descriptive and also most impactful sense that we have.

  Throughout history, the reason you can see me on this call today and you can hear me through this microphone is because we’ve been able to accurately map RGB and color and visuals—and so we can build screens. And we’ve also been able to map frequency, so we can transmit sound—and so we have things that we can hear and things that we can talk into and things that we can see. But we haven’t been able to map and send digitally smells. And so that’s what Osmo is working on.

  I’m sure, like me, whenever I talk about this, my mind goes a-flutter in kind of all the different ways that we could see this impacting the world around us. Of course, the security and defense applications—think replacing the drug or the bomb-sniffing dog. The health diagnostic impacts—we’ve seen cases of a woman in the UK actually being able to smell.

  So there’s a whole world of odor and scent molecules in the air around us that tell us so much about ourselves and about the world that hasn’t been tapped into—until we’ve been able to map that. And this is a breakthrough in artificial intelligence that led to the creation of the company.

  The final one here is Orchid. This is actually being able to measure and test embryos through IVF, get more data—genetic data—on different embryos so parents can make more informed decisions about that process. Really starting to think about this Defy Darwin theme—how are we actually able to harness biology, genetics, to enhance society moving forward?

  So what is our role here? I’ve talked a lot now, but what is our purpose? And when we start building out this thesis and this thinking and this excitement, what do we go do with that?

  This is a great example—we hosted our first Defying Darwin Night in San Francisco a few weeks ago. This is a playbook that we run very often. We start to build, we see market tailwinds. So we saw the rise of synthetic biology, we saw the rise of AI, and we also saw this national imperative—more from the top down—to really support what’s happening in biotechnology and saw this as a national security imperative like we’ve talked about.

  So we pull an event together. We pull an evening together. We bring 75 to 100 folks—investors, founders, operators—across defense and national security, across biotech, across personal health—all together in a room, and really have these candid conversations about: one, the innovations that we’re seeing around us that are going to shape the future, but also what are those barriers that we have to overcome? And what are some things that as a community we can do to break down some of those barriers?

  This is a great opportunity for us to identify who the movers and shakers are and also some of the really compelling opportunities in these markets that we build a thesis around.

  I touched on these already—just a little bit more detail on each: Syncro, Haifa, Acorn, Osmo, Pilgrim—great companies. I urge you to check out their sites. Most of these are portfolio companies, so check them out on our website.

  And then finally—or nearly—the window of opportunity that we have here: US leadership in biology and biotechnology is leadership in health, it’s leadership in defense, it’s leadership in the economy. Because the potential impacts if we don’t are so great and will impact all of these different verticals. Other nations—especially China—are not waiting. They have, again, this national imperative and belief in the biotechnology sector. And so we can’t wait either.

  And we’re seeing a lot of energy and innovation coming from a younger generation, coming from earlier-stage companies—that’s really promising. And those companies and the people at those companies are really going to shape the future—from a national security perspective, but the future of biology in many ways.

  So if this was interesting to you today, you want to chat with us more about it, you want to chat with us more broadly about the US Strategic Technology Fund, I urge you to scan the QR code on the screen right now. We’d love to find some time to chat with you. You can also view some more materials if you’re not a phone call person in the QR code on the left side of your screen, I believe.

  And if you’re already a part of the network, thank you. We’re excited to keep building this together—excited to keep educating on the things that we’re looking at, the things that we’re learning. And like I mentioned, this is really kind of becoming a big thesis area for us. So expect much more content, much more material coming out in the coming weeks and coming months.

  Thanks so much everybody. Really appreciate you taking the time.

  Speaker 1:
  Okay, thank you Drew. As always, thanks for being part of this important conversation.