Chemical Industry
We analyzed 60 markets to look for great startup opportunities. We gathered size and amount invested to build opportunity scores, then considered falling input costs to pick a few top opportunities to highlight. One of the top opportunities we found was chemical products.
American chemical products are a roughly trillion dollar market. But there are less than 100 Series A teams building here! Chemical products is a diverse category including charcoal, antifreeze, food additives, and pyrotechnics.
There are multiple ways new technologies are transforming this market. New synthetic biology tools are enabling the creation of enzymes that can reduce energy costs at each step of a reaction. This is how Solugen (pictured above) makes chemicals cheaper than traditional processes. New AI models could discover materials to accelerate existing processes. The dropping cost of solar is creating a massive need for battery manufacturing and the required input chemicals.
Dropping Input Costs
Costs for enzyme engineering have dropped 100x in the last 15 years.
Costs to train and run AI models have dropped at least 1000x in the last 5 years.
Large Market
The U.S. chemical manufacturing market is far larger than the U.S. SaaS market. Yet in the last decade, there have only been 67 Series A chemical manufacturing companies, while there have been over 1,200 in SaaS. And total funding has been far lower in chemicals.
Few Startup Competitors
We found 67 Series A startups in the U.S. Chemical Manufacturing space in the last 10 years. In total, they’ve raised $6.8B. Compare that to the U.S. SaaS market, where startups have raised $57B, roughly 8x more. This is despite the SaaS market being 70% smaller than the Chemical Manufacturing market.