Industrializing biomaterials: Five critical transitions in scale-up

The biomaterials sector has rarely been better positioned. Despite economic recession, investment plans flourish, policy frameworks are strengthening, and the pipeline of promising technologies has never been deeper. Still, moving toward a commercial facility remains difficult, and the challenges are often unexpected. In this article, biomaterials experts Tuija Vartia and Jarno Peltonen discuss why biomaterial innovations often fail to scale from laboratory to industrial production.

Walk the floor of any biomaterials industry event and you will find no shortage of ambition. What you find less often is an honest conversation about why so many biomaterial ventures that clear the scientific hurdles often struggle to scale to industrial production.

The failure rate at the transition from laboratory to commercial scale is high, and it is not primarily driven by bad science. It is driven by compounding challenges that are – based on Elomatic’s experience with startups – partly technical, partly organizational, partly financial, and partly commercial. Understanding where those challenges cluster, and what separates the ventures that navigate them from those that don’t, is the subject of this article. 

A Journey that looks linear – but isn’t 

Typical biomaterials industrialization process has distinct phases: ideation, laboratory development, pilot and/or demonstration plant, commercial operation, and replication. Presented as a diagram, this progression looks orderly and manageable. In practice, each transition represents a different risk profile and a different set of things that can go wrong. The costliest mistake is assuming that success in one phase reliably predicts success in the next. 

The ideation-to-laboratory transition is where foundational assumptions are made, and their quality will determine how much pain comes later. The ventures that fare best at this stage are those that design their early experimental work to stress-test assumptions rather than to confirm them. There is a meaningful difference between asking “does this process work under optimal conditions?” and asking “what conditions does this process need, and how realistic is it to provide them at industrial scale?” 

The laboratory-to-pilot gap is bigger than it looks

The laboratory-to-pilot transition is where bio-based processes reveal their industrial character, and where real engineering constraints emerge.

As Holland et al. note in Engineering Biology, bio-based feedstock is a prime example. Laboratory work uses clean, consistent inputs. Industrial feedstock is chemically complex, with availability and quality varying by season, location, and supplier. Processes that work elegantly at litre scale become engineering challenges at cubic metre scale. Yields robust in batch experiments prove sensitive to the continuous operation that industrial economics demand.

Managing feedstock variability and the inherent variability of bio-based processes requires fundamentally different skills than laboratory work. This is where the capability gap becomes apparent: designing, commissioning, and operating a pilot plant demands expertise genuinely different from conducting research. In our experience, this gap is often underestimated in industrialization.

The most common failure mode isn’t technical 

Ask most people what causes ventures to fail at scale-up, and the answers cluster around technology risk, capital, and market timing. These are real factors. But capability mismatch appears at least as frequently and is discussed far less openly.

Even the academia has relatively recently started to tackle the matter, as discussed by Szathmári et al. in Frontiers in Psychology. The founding teams of biomaterial ventures are typically strong where the venture began — in the science — and often weaker in the disciplines that industrial scale-up requires: plant operations management, procurement and supply chain development, regulatory affairs, and the commercial skills needed to negotiate offtake agreements and financing structures. 

The ventures that manage this transition well treat organizational design as a strategic priority, thinking early about the capability architecture achieving their commercial-scale operation will require, and building toward it through hiring, advisory relationships, and industrial partnerships well before the demonstration plant is commissioned. 

The hardest transition: commercial scale

If there is a single point where ventures are most vulnerable, it is the move from pilot/demonstration to commercial scale, in which every challenge arrives simultaneously. Capital requirements make a quantum leap. Technical risk, while reduced, has rarely fully resolved.

Regulatory complexity also increases. And the customer must now make a real procurement decision with real switching costs. Kampers et al discuss in Trends in Biotechnology the brevity of the Valley of Death and means to narrow it, but eventually, successfully crossing it requires a proof of commercially viable concept. 

Venture capital and regulatory constraints in first-of-a-kind projects

Based on our experience, traditional venture capital moves too fast for first-of-a-kind projects. The capital these projects need is patient and structured: combinations of strategic industrial investment, public financing, and offtake-backed debt.

As Gatto et al. note in Sustainability, assembling the financial architecture requires sophistication, lead time, and sustainability built into the business model from the start, not added later.

Regulation and sustainability add their own layer of complexity. Permitting timelines are rarely short, LCA methodologies are evolving inconsistently across standards bodies, and certification schemes have proliferated in ways that create both opportunity and confusion.

Typically, the ventures that manage this all most effectively treat regulatory and sustainability strategy as a design input from the outset. The reward for doing so is significant: in a growing number of markets, sustainability credentials are becoming prerequisites for access rather than differentiators within it. 

The demand side has its own scale-up problem 

Scale-up conversations focus almost entirely on supply. The demand side receives less attention, but it can kill a venture just as easily.

Large industrial buying processes aren’t configured for novel suppliers. Specification changes require lengthy approvals, supply risk frameworks expect commodity reliability, and price premiums need business cases that can’t be built without customers. Meanwhile, without binding offtakes, securing project financing becomes nearly impossible.

Market development must therefore start years before commercial volumes exist. Successful ventures invest early in deep customer relationships through pilot programs, co-development partnerships, and joint specification work that build buyer readiness alongside production readiness.

A well-structured long-term offtake agreement provides more than revenue: it enables project financing and signals market validation to investors.

Sources:

Gatto, F., & Re, I. (2021). Circular Bioeconomy Business Models to Overcome the Valley of Death: A Systematic Statistical Analysis of Studies and Projects in Emerging Bio-Based Technologies and Trends Linked to the SME Instrument Support. Sustainability, 13(4), 1899.

Holland, C. & Shapira, P. Building the Bioeconomy: A Targeted Assessment Approach to Identifying Biobased Technologies, Challenges and Opportunities”. Eng. Biol. (2024):8, 1-15.

Kampers, L.F.C., Asín-García, E., Schaap, P.J., Wagemakers, A., & Martins dos Santos, V.A.P. (2021). From Innovation to Application: Bridging the Valley of Death in Industrial Biotechnology. Trends in Biotechnology, 39(12), 1240–1242.

Szathmári, E., Varga, Z., Molnár, A., Németh, G., Szabó, Z.P., & Kiss, O.E. (2024). Why Do Startups Fail? A Core Competency Deficit Model. Frontiers in Psychology, 15, 1299135.