Resources

• GALY: a start-up in cellular agriculture
• Forbes: Lab-Grown Cotton Enters The Market With Galy-Suzuran Partnership
• GALY won the 2020 Global Change Award by H&M Foundation
• New York Times: Global Brands Find It Hard to Untangle Themselves From Xinjiang Cotton

Host & Guests

Climate Rising Host: Professor Mike Toffel, Faculty Chair, Business & Environment Initiative (LinkedIn)

Guest: Luciano Bueno, Founder and CEO at GALY (LinkedIn)

Transcript

Editor’s Note: The following was prepared by a machine algorithm, and may not perfectly reflect the audio file of the interview.

Mike Toffel:

This is Climate Rising, a podcast from Harvard Business School, and I am your Host Mike Toffel, a professor here at HBS.

Today’s episode is the fourth in our series on decarbonizing the roots of value chains, where we’re looking deep into supply chains that serve many industries. Previously we talked about the technical products of green concrete and green steel, and agriculture through the lens of regenerative agriculture. Today we continue our focus on decarbonizing agricultural products by focusing on lab-grown cotton. Luciano Bueno, founder and CEO of GALY, joins me today to talk about how his biomaterials start-up uses sugar to feed cells and grow cotton in the lab. Luciano will share how he rebounded from a venture that failed, and then started GALY and grew it into the Series B company it is today. I’ll also ask him to share his views of the future of lab-grown fabrics and his reflections on entrepreneurship in climate tech more broadly.

Here's my interview with Luciano Bueno, founder and CEO at GALY.

Luciano, welcome to Climate Rising. Thanks so much for being here.

Luciano Bueno:

Thank you so much for having me. My pleasure.

Mike Toffel:

So let's start with just a brief intro. Can you tell us a little bit about where you come from and how you got to being the CEO of GALY?

Luciano Bueno:

Yeah, absolutely. So I am originally from Brazil, born and raised, and came from a family of five. So my family always had that entrepreneurship path and mostly my dad, and that's what inspired me to be where I'm today. So on the other hand, they also went through the struggles of entrepreneurship. So we've been through very, very tough times, meaning that even not having enough food to eat on the next day. I think I learned a little bit about the glory and I learned a little bit about the tough times, but that potentially helped me prepare myself what I would expect and it's not a totally surprise when I started. So then happy to talk a little bit about my experience. In 2018 I moved to the US. I got a green card that allowed me that possibility, which is called the EB-I. And then that's where I started GALY. So that's in a nutshell.

Mike Toffel:

Got it. So let's talk a little bit about how you got from the idea of being an entrepreneur toward figuring out that you wanted to be in the lab-grown agriculture space. There's some gap there. So how did you get the idea for GALY?

Luciano Bueno:

Yeah, absolutely. So I've been in textiles industry for a while. I started unofficially selling t-shirts door to door when I was in high school just because of financial needs. I had to, that's how I financed myself. Then I went to undergrad in business and I went to work for Deloitte. At Deloitte, I learned audit and consulting. One of the biggest reasons I joined Deloitte is because they were the consulting company with the majority of clients in fashion and luxury businesses. So I would have the opportunity to work with those companies. So I got very excited and I worked there for a while. And then and fortunately while I was working there, because in Brazil you can do undergrad and work at the same time. So I was studying at night and then working on morning and afternoons. In my lunch times I used to sleep a little bit so I could get the pace, but wow, that was another time. And then unfortunately, my mom passed while I was working there, so I was very focused in making money because of the financial needs we had. So I think at that moment when my mom passed my mind shift a little bit to can I do something that really matters, to me, to the world and with purpose? So that allowed me to go to a different path. I went to start in working venture capital, and that's where I got the bug for entrepreneurship on a hardcore startup type. And then when I had opportunity to study in Silicon Valley, oh boy, that opened up a whole new section of my brain that I didn't know even existed.

Mike Toffel:

What do you mean by that?

Luciano Bueno:

You start to hear about those buzzy words at that time, autonomous vehicle, AI, blockchain, biotechnology, that are very different from your day-to-day. But that just activates a different part of your brain that like, "Wow, there is this world that is literally by my side, but I never heard about it." And then when you start to go deeper, you see the fascinating possibilities that those buzzwords, or let's name it technologies, can allow you to get. And then with that start a company, failed a company, but gave me these scars to start GALY later. And the inspiration of GALY was literally looking to climate change. I was inspired by what food companies were doing in this space, and then I thought about using the same approach, but for textiles. So that's what originated GALY in a nutshell.

Mike Toffel:

Yeah. So talk a little bit about the food inspiration here. So what were some examples of what you thought was interesting that might be able to be applied to textiles?

Luciano Bueno:

Yeah, very inspired by how people at the time were looking for different approaches to produce the same things that we consume every day. So starting with plant-based burgers, I was fascinated about Impossible Foods. Fascinated. I visited their HQ, it was mind-blowing to me. And I had opportunity to visit and talk to many of those entrepreneurs. I didn't have any connections. You start with one and then you keep that momentum. And then when the cell-based meat started to appear, and then I understand that, oh, they're literally looking to replicate the same thing. It's not a substitute; it's exactly the same thing. That's great. Can we do something like this for materials? And then when we started to look into cotton, we figure out, can you do bacterial cellulose? But then when we looked into cell culture, we thought we could do the real thing, and that was mind-blowing to me, and that's where we started to dive deeper.

Mike Toffel:

Got it. So we'll talk a bit more about what the technology of cell-based even means. But before that, I know that in a way, lab-based is a continuum of different types of technologies. I think you've characterized it maybe three: there's a chemistry approach, there's a precision fermentation approach, and then more recently there's this cell-based approach. So why don't we just begin with a little bit of a layout of that landscape of what lab-based means. So can you talk a little bit about each of these three and maybe provide an example or two?

Luciano Bueno:

Yeah, absolutely. So on the first approach, we talk about chemicals. So literally replicating products or creating new products from traditional chemistry. So the DuPonts of the world. So they were the startups at the time to be able to create things that we consume every single day. So that was the first, I don't know if it's considering the first wave, but I consider the first wave there.

Mike Toffel:

So the DuPont example is creating new materials, new products that don't exist in nature, that could only be created in the lab and then at scale. And that's sort of the first generation, as you see it.

Luciano Bueno:

That is correct. And then you go to the second wave or the second generation, which is the fermentation technology. So on the fermentation technology, you're talking about the examples that we consume every day with E. coli. So you're using a host or a living microorganism to grow that specific component of desire. In that case, you can use an E. coli to replicate a specific component of vanilla, as an example. When you don't need the entire product, but you need a molecule, that's one of the best approaches and more scalable way of doing things like that.

Mike Toffel:

Got it. Okay, great. So that's precision fermentation. This is taking the idea of fermentation, which of course has been around for a long time with beer brewing. Hundreds of years, maybe even thousands of years. And in a lab being more precise about it, working at the molecular level to try and create these byproducts in a way of that process.

Luciano Bueno:

Exactly.

Mike Toffel:

Okay, great. So that's precision fermentation. And then that brings us to cell-based, where you said your inspiration was meat. This is the idea of growing meat in a lab where the actual DNA is identical, if I understand it correctly, to growing meat in a traditional way in a cow.

Luciano Bueno:

That is correct. On the cell-based approach, the advantage and why you would use a cell-based approach is when you want to produce a product that is more complex, that is a combination of different molecules combined in a certain manner that matters for that market. So in the case of cotton, cotton is a complex structure of cellulose and a few other proteins, but literally 95% is cellulose. But it's structured in a way that is almost impossible to replicate in a different manner than literally getting the plants to do their job. So by doing that, that's where the advantage of cell culture is. It’s literally replicating the same thing with all the complex characteristics that you would find in natural products.

Mike Toffel:

Got it. Now, of course, we have a conventional way of growing cotton in the fields which have a rich history, good and bad. And when I think about cotton and cotton production, I think about the intensity of the labor required to pick cotton. And then I think about the environmental issues of water and chemicals in particular. And of course the land required for it as well. What are the benefits of bringing all of this into a lab relative to the conventional cotton?

Luciano Bueno:

Yeah, I think the problems are out there as you line up very precisely. What I would add on that is I don't think we as society, we are prepared for what will come. What I mean by that is I don't think we are prepared for what will come in terms of climate change. So if there is a shift that suddenly you're not able to produce cotton or other agricultural products because of climate change, what do you do about it? Let's assume that you're the biggest producer of cotton today, but then tomorrow you're going to have flood or any other climate disaster. You may not be able to be the biggest producer anymore. So with that, what our technology enable is to shift those things a little bit. So countries like Japan or UAE, places that you never thought agriculture would be possible, you make it possible. So you're creating a new economy by doing that. And then of course, the amount of land needed is much lower. So we made an estimate with our LCA that we are 500 times more efficient than land. The reason is twofold. One is because you're growing a 3D structure, and the second is because you do multiple harvests a year. So typically when you go to the field, you're growing 180 days from a seed to a cotton bulb that you can harvest. In our case, as we're leapfrogging the plant and you go directly from the cell to the cotton fiber, that can reduce the amount of time you would need to do that. So can you do it in 40 days or even 20 days?

Mike Toffel:

Wow.

Luciano Bueno:

So if you do that, you're able to harvest 10 times in a year. And that's how you increase your capacity, not only 3D structure, but also in that regard. And then no chemicals needed because even if you use the most horrible chemical in the planet, it's in a closed loop environment. So you're not literally throwing it out there in the field that would contaminate other people and animal and plants.

Mike Toffel:

And with chemicals in conventional cotton growing, is this primarily fertilizer? Primarily pesticides?

Luciano Bueno:

Pesticides.

Mike Toffel:

Pesticides.

Luciano Bueno:

We have around 2,500 types of chemicals and pesticides that we use for cotton production today. For different reasons. The most well-known are their roundups, but it's crazy. It is insane. Are there other ways that we can think about doing the things that we love, but just in a different manner?

Mike Toffel:

So in indoor agriculture, there's lots of benefits as you've just described, but you need heat and you need lighting that in nature is provided typically by the sun. So that means there's an energy draw. How do we think about the trade-offs? So we have less land, we have certainly less chemicals, but now we have more energy, I'm gathering?

Luciano Bueno:

The challenge with indoor agriculture is today it is related to the photosynthesis of that plant. So if you're growing a tomato or lettuce, you have a photosynthesis cycle. That would kind of make sense on the economic side because they're growing 40, 60 days max. When you go and try to grow a cotton plant, let's put it this way, in a greenhouse. It's not possible because the time you take to grow is just so long that the electricity needed is so much bigger than what you're getting in the field. So that's the main challenge there. And then the second is the efficiency that we could increase with the light capture on the photosynthesis environment for the greenhouse compared to the field grow. In our case, we don't have photosynthesis anymore, so we're not dependent on it. And by the way, cotton is one of the least efficient plants in photosynthesis. So we're not dependent on this anymore. What we are doing is we're substituting photosynthesis. In our case, we are providing the carbon source directly to the plant cell, not the plant, the plant cell. And with that, the cells get all the food they need. So the only thing they have to do is to grow. That's the only thing.

Mike Toffel:

So let's walk through the process of what lab grown cotton is. So what are the inputs, what are the processes and what are the outputs?

Luciano Bueno:

Yes, inputs: cells, water, sugar, and a few nutrients like potassium and so on. Outputs: product, water which you can recycle, and maybe a little bit of sugar left over. But if the process is efficient enough, the cell should consume everything.

Mike Toffel:

And what does the output look like in cell-based cotton? Does it look like cotton balls?

Luciano Bueno:

Yes. Well, it looks like a bunch of cotton fibers floating.

Mike Toffel:

And the process, it takes 40 days, I think you said. And are you doing anything during this process or are you just letting the reaction occur?

Luciano Bueno:

So let me explain how the process works. So we extract a piece of the plant, literally cutting a piece of the plant, let's assume a leaf. We put that leaf in a solid plate, which is a Petri dish with the nutrients it needs to generate. What typically happens is the tissue that we cut regenerates an entire plant. That's how we do most of the things in agriculture today, for the plants that you don't have the seeds. So what we do is we pause that cycle and we revert it back to what we call totipotent cells. So very, very similar to the stem cells for humans, they have the ability to transform into any part of the plant. So I put them back into the totipotent stage, we grow them in liquid with the sugar and nutrients and so on, and then we activate a totipotency to start differentiating that into cotton fiber. And then you can think about a large vessel with liquid and cotton fiber floating, and then you would harvest that and be ready to use. That's in a nutshell how the process works.

Mike Toffel:

Got it. And what's the energy intensity of this cotton relative to cotton grown in a conventional manner?

Luciano Bueno:

Yeah, we've done a study actually. So, there are a few ways that you can measure this. So we measure by CO₂ emissions: we are around 77% less CO₂ emissions compared to conventional cotton. We talked about use of fossil resources. Let's assume that all your energy is not coming from sustainable sources like solar-powered energy. It's coming from a fossil resource for whatever reason, even by doing that, we're using 66% less than the field grown. So when you're combining all those metrics, we have what they call in the LCA, the single score, we’re 94% better than field grown.

Mike Toffel:

And the single score in a LCA or lifecycle assessment, it combines a variety of these environmental impacts.

Luciano Bueno:

That is correct.

Mike Toffel:

Water use-

Luciano Bueno:

Water use, land use, and so on-

Mike Toffel:

Chemicals, and greenhouse gas emissions, for example. Got it. Great. So that's a helpful description of the environmental benefits and a bit of the process. And where are you in terms of the technology development? Are you in a pilot phase? Are you at production scale?

Luciano Bueno:

Tough tech takes time. It takes a lot of capital and it takes time. So I would say that right now we've done lab-based and we are starting to think about industrialization. Industrialization meaning how can you create industrialization facility that would allow you to prove the unit economics and then scale that up. So that's the phase we are in right now, and that's what we are looking to overcome in the next few years.

Mike Toffel:

How are you deciding which markets to target with this cotton?

Luciano Bueno:

So on the market side, we started looking to fashion and textiles. I think heavily influenced by the need of the market and my previous background. However, we started to see that cotton is used in literally anything from TV screens, which I'm still trying to figure out how exactly it's used, to dollar bills to tissue, to cotton pads. There are so many different things that you can use the cotton for, which is beautiful. One of the advantages of our process is that our cotton is very pure. The challenge you have in the field is you grow the cotton and then you have to gene it and bleach it because you have different parts of the plant in the cotton fiber. So it's not always clean enough. And for medical use, that is very, very important. So if we are able to use our cotton fibers for a medical product, the cotton pad as an example, that could be a first market entry. But our intuition and our goal is to make this product as scalable as it is in the field today, to be able to compete with what is out there, literally producing T-shirts that you can buy in a Walmart to medical cotton products.

Mike Toffel:

So where are we on the cost curve here? We talked about the technology trade-offs and benefits. Where are we on cost?

Luciano Bueno:

So on the cost curve, when we started, it was very, very, very, very, very expensive, inefficiency happening, et cetera. So in our case right now, we are confident that are on the right path to get to the cost needed to go to the market as a first market entry. And in the future, do I believe we can out-compete the price of commodity? I do believe it's possible and there is a rationale behind it, but I do believe it's possible.

Mike Toffel:

So at some point you could be at cost parity with conventionally grown cotton?

Luciano Bueno:

I think so, yes.

Mike Toffel:

So in the meanwhile, while you're not, I imagine there's at least two ways you can go to market. One is go to market, for example, in the medical space because your product doesn't require the post-processing that other products do. So getting to the final product, even if your cotton is slightly more expensive than conventional cotton, the savings in these follow-up processes of the cleaning and the purifying that your cotton doesn't require, provides an opportunity for value capture. And the other would be, I'm guessing, there's some brands where they want to market the fact that their cotton is that much more environmentally beneficial, much less or maybe no pesticides, 60 to 70% less greenhouse gas intensive. For companies that are trying to convey an improved environmental image, it seems to me like this ingredient can have value and then they could perhaps charge a premium for it and perhaps pay a premium to you for your product. Are these the two avenues you're thinking about? Are there others I'm missing?

Luciano Bueno:

Yeah, so I would say that the premium should be there for your advantage in terms of price, but it should not be there to make the business work -- otherwise you are in trouble. And that's not our case. So we're not building a business that we are dependent on a premium because people perceive the value of sustainability because that alone may not be enough. So in our case, we are focusing on how can we make a cotton that is so cheap that you can find in a t-shirt of H&M for $6 or for $10? That's the goal. We are not there yet. That's the nature of the process. However, you start on the higher range so you can work with other brands or even the fast fashions in other specific lines and bring down the curve assuming that the quantity is getting higher over time. So that's our goal. So we may start on the, let's say the premium type of thing, but we cannot depend on the premium to make a successful business.

Mike Toffel:

So it's a scaling process basically. So maybe try to sell at a price premium as you scale and as you achieve efficiencies, but the end goal – and your investment thesis, it sounds like -- is mass market.

Luciano Bueno:

Yes, and we are very transparent with our clients and partners as well to say, "Look, here's opportunity, here's the risk. However, when we get there, game over, it will take a while, but it's game over, I can guarantee." And then we ask them, "Would you buy in now to help us get there together, or would you be interested when we are there already?" Which the majority of clients would pick that option, which is fine, but those are not the first clients that we need to work with. So that's a little bit on those dynamics.

Mike Toffel:

Now, meat's been at it for a while, lab-grown beef, and I remember the early headlines for, I can't remember exactly, but the thousand dollars-

Luciano Bueno:

$300,000 for a burger.

Mike Toffel:

$300,000 burger. Yeah, exactly. Clearly it's a little bit of a cheap shot. But the idea of course is that at that moment it's much more expensive. They too, were on a trajectory for I think eventually for cost parity. Is the meat story one that you refer to as an example of what's possible? Or perhaps you're differentiating yourself from that and saying like, "Well, it's taking them longer than they thought, we're going to choose a different path."

Luciano Bueno:

Yeah, I would say that was an inspiration for what is technologically possible in terms of cell-based. In terms of cost, we got to look into other industries as an inspiration. We can't produce commodity by using fancy bioreactors that biopharma uses. It makes no sense. So can you simplify the bioreactor enough in a way they're able to reduce 90 to 95% of the CapEx associated with that bioreactor. We have to start thinking very early on when you're developing that technology, that you're not trying to build the perfect process. So I would say that the clean meat industry is very inspiring in terms of what is technically possible. But I would say cost-wise, scalability wise, feasibility wise, economically saying we have to look into what other industries have done successfully.

Mike Toffel:

What's the best argument that you find with your investors in giving them encouragement that this is possible?

Luciano Bueno:

Yeah. Well, I would say it's a very simple math of yield conversion. So how much carbon source you're converting into product. So let's assume they're using sugar as the input, and sugar is responsible for let's assume 80% of the COGS, and the sugar costs you $400 per metric ton. Then your theoretical limit for COGS, if you're assuming two to one conversion, two kilograms of sugar to one kilogram of product, you'll be around a dollar per kilo. That's simply math. So then the ambition and the challenge is how can you get there? And then investors: here are all the approaches that we are working in parallel to help us get there faster and better. So that we typically start with this simple math that everybody understands about the conversion. And then, those are the approaches which we are using today that we believe will help us get there.

Mike Toffel:

Especially in Europe, there's some aversion to genetically modified organisms, which are used ubiquitously in the US in certain crops. But in Europe there's some concern especially about food products, but more broadly about covering agricultural fields with genetically modified organisms. In part there's sort of a, we don't know what we don't know, what are the underlying risks? Precautionary principle comes to mind. Are you facing any of those similar types of concerns from folks who are like, "Well, do we really want to create cotton in a lab? We have a perfectly well-tested approach in the fields."

Luciano Bueno:

So before we started the company, I went and talked to multiple companies, potential clients, say, "Hey, if you have a different way of producing cotton..." which I didn't know at the time, "... would you buy it and why? What are the main pinpoints you're having today?" And I created mock business cards. I got a lot of those meetings, but that helped me build the thesis around that if there is a problem, it should be a few solutions available, but maybe we can create a better one. And that’s what originated to go into GALY. When you're looking into lab grown/GMO for materials, you think it's actually cool. It's like, "Oh my god, this is a lab-grown material that I'm wearing. That is cool," versus eating. It's a different argument, I would say. So people in the brands are very welcoming to lab-grown materials in general. And if you can keep the same natural aspect of a cotton fiber they get from the field, that's a huge win.

Mike Toffel:

So what were the pain points that the clients said that they face with cotton?

Luciano Bueno:

Yeah, supply chain issues, lack of transparency in the supply chain, lack of instability. You don't know what you're going to get. Maybe you get a cotton that was growing a certain way with fair labor and maybe you don't.

Mike Toffel:

Right. So labor concerns associated-

Luciano Bueno:

Labor concerns.

Mike Toffel:

... with production.

Luciano Bueno:

Labor concerns. CO2 emissions for obvious reasons. And the majority of the brands, the two biggest fibers consumed today are polyester and on the natural aspect is cotton. So if you're talking to a brand that is on the casual wear or fast fashion, they're the biggest consumers of cotton out there. So if they don't find any other alternative, they're just not able to first hit their specs in terms of CO2 requirements. And second, continue with those challenges that recently we had with this scandal of cotton producing in China. All of those different aspects that affect them negatively, not only on the sustainability aspect, but also on the branding side. You had that backlash of the brands that pulled out the cotton from China and then they say, "Okay, we're not going to buy from you anymore," in that Chinese market.

Mike Toffel:

Just say a little more about that Chinese scandal.

Luciano Bueno:

Yeah, so what happened there is there is a region in China that it's claimed that the cotton is produced with slavery or almost slavery work. However, this cotton is certified.

Mike Toffel:

As being?

Luciano Bueno:

As being sustainable or being a better way of producing. Then, it's like: what is happening?

Mike Toffel:

So you're not sure whether to believe that certification.

Luciano Bueno:

Exactly. So then when the brands say, "Okay, we're going to stop buying cotton from this particular region in China." But then the Chinese market, from what I understand, understood that, "Oh, actually you're being against us as a country, so we're not going to buy your product anymore. " So they literally lose billions of revenue because they were not able to solve a simple issue on the supply chain and literally lose entire market because of that. So I think having the security around that, that's pretty valuable.

Mike Toffel:

Where does the name GALY come from?

Luciano Bueno:

Actually, GALY comes from Growing Artificially in the Lab. And then we thought that saying, "I work for GAL was kind of weird." So we add a Y, so it's Growing Artificially in the Lab Yoohoo. That's it.

Mike Toffel:

Right. So it's an acronym. Interesting. I definitely did not know that. So you've been going through a fundraising process all along the time you've been developing this company. Can you talk a little bit about how your pitches have evolved and how you've decided which companies to pitch to, which ones are more resonant with your message and which ones are just not interested?

Luciano Bueno:

I would say that the market right now, it's tough and maybe it is the normal market and we were used to the good times, but it's definitely tougher to fundraise. So processes take much longer and statistically you just have to reach out to more people to still make the funnel work. So those were points that we had to quickly improve because if you go out there and say, "Oh, we're going to raise in three months or six months, that may not happen." So you need to have enough cash for 12, even 15 months, which is kind of insane because typically companies raise money for every 15 months. So you finish up fundraising, you have to start over. No, you probably have to build a plan for we're going to run this company for three years, and that gives you more breathing room. So that's one learning. The second learning is there are a lot of climate funds out there. However, there are a lot of those players who still have the mindset of SaaS and e-commerce. And I used to work for a VC of SaaS and e-commerce.

Mike Toffel:

SAS meaning software as a service?

Luciano Bueno:

Software as a service, yes. So the metrics and how you evaluate a company are totally different. It doesn't matter that much about your ARR, your annual recurring revenue. It matters of how developed the technology, how scalable it is, and it can be. So then instead of generating 1 or 10 million revenue, you're going to generate 200, 300 million revenue in one shot just because once it's validated, it's a matter of selling out. So it's a different mindset than what investors are typically used to it. So that's a challenge. And then the third aspect is investors do not love, for reasons that make sense, but do not love capex-intensive businesses because if you're taking a VC money that wants a 10 x return and you're putting a fixed set asset that you could borrow for 1.5 [percent], that's not good use of capital at all. However, to be able to grow a company like a deep tech company like us, you’ve got to invest in CapEx and you can't get a lender to borrow your money because your technology is not well proven. So it's that challenge of how to pitch it in the best way? So in our case... And interest rates on top of it. So when interest rates are close to zero, yeah, that's a good business. But when interest rates are in the reality that they are today, then we have to reframe. So what we learned is we went from can we simplify our CapEx in a way that we make it more CapEx efficient? Can we do 90% better than other industries and companies? That's our focus. Great, let's do that. Just because of the market conditions. Instead of building a facility for 300 million, can you build for 30 million? So that was one approach that we evolved. The second approach that we evolved is also focused on climate investors. The reason is twofold. One, there is a genuine angle of doing good for the world and also giving back their returns. But I think there is more patient capital out there in those funds, so you are able to evolve the company over time because those things take time. And then the third aspect and final aspect I would mention is how replicable your technology is, or what are the optionalities you're buying in that allow you to go to multiple markets or multiple directions. So everybody loves to talk about "Oh, my platform" because we borrowed this from the SaaS world. But it's true if you're able to use, in our case are able to produce lab-grown cotton, can we produce other lab-grown agricultural products? So using the same foundational technology. So that's also another thing that we evolve over time.

Mike Toffel:

So what are those other technologies that you imagine applying your technological know-how to?

Luciano Bueno:

I would say almost anything that comes from a plant, it would be better to produce in a lab.

Mike Toffel:

Better from an environmental perspective?

Luciano Bueno:

From environmental perspective, from everything that we discussed on the value proposition, having control on the supply chain, price stability, all of the above.

Mike Toffel:

So this is in a way replicating to some extent the idea of glasshouse technology or greenhouse technologies, but using a very different set of technologies. The advantage of glasshouse technology is you can control very carefully the water and the chemicals and the lighting to create a much more consistent production process. In that case, not always clear that the environmental benefits are there because of the energy required for heating and lighting. In your case, you don't have those because you're a very different process not using photosynthesis as you mentioned. So the idea that you can use lab-grown technologies that you've developed for cotton could also apply to... is it just vegetative products or also animal products, like wool?

Luciano Bueno:

So when you're going to animal products, the mammalian cell culture or the cell-based meat could be the best technology for it.

Mike Toffel:

I see.

Luciano Bueno:

By growing a different microorganism, it looks the same, but it's very different by growing a plant cell versus a mammalian cell. When people claim that, "Oh, we are doing mammalian, now we're going to do plant cell." I'll be a little bit cautious there. It is not that straightforward.

Mike Toffel:

Interesting.

Luciano Bueno:

They are transferable. So I would say plant-based products would be our focus.

Mike Toffel:

So what are the other major plant-based textile raw materials?

Luciano Bueno:

Yeah. We can also open our minds beyond textile, but if you think about textile: linen is an example. But if you open your minds to other things, you can think from the expensive crops like saffron and vanillas of the world, to the commodity crops like coffee and cocoa. So you can expand the possibilities there with this lab-grown application.

Mike Toffel:

So beyond textiles to foodstuffs.

Luciano Bueno:

Or even on textiles: latex, rubber. So there are multiple ways that we can use this technology for, and we have to be careful because you get so distracted by so many different opportunities and so excited. Can you grow your grapes and produce a different wine? Can you grow ketchup in the lab? There are so many different things out there that I am passionate, and I hope to be working with this for as much as I can for the rest of my life if possible, because there's so much to be done there. You solve one cotton problem, what is the next, what is the next? And you keep doing and evolving that for the rest of your life.

Mike Toffel:

So when you're protecting your intellectual property, I'm imagine you're doing this through patents. Do the patents require you to specify the product like cotton, or are there process patents that could apply to other end products as well?

Luciano Bueno:

Yeah. You always start the patent filing with the most broad claims possible, and then you narrow down. So in our case, we went very broad, so I would say that is applicable to other crops as well.

Mike Toffel:

I see.

Luciano Bueno:

And we filed multiple patents across different families as part of the strategy and in a way that what we are doing is not plant cell technology. Plant cell technology is one aspect to it, but what other things? Your bioreactor can be patentable or the genes they're using? There are multiple ways that you can protect that spectrum on the IP side. And then with that, by doing things, also collecting the data and doing things faster in the lab, you're able to create that moat. The moat around the IP and the moat around the technology itself that you're so ahead of the curve that nobody can out compete you.

Mike Toffel:

Have you decided where your first production plant is likely to be?

Luciano Bueno:

First production plant, for sure US. I would say that's the first one. Second, third, fourth, we are doing a screening right now. It depends on the client needs, but potentially Thailand could be a good one or near to Vietnam. So that's a little bit on how we are thinking, but the first one is US.

Mike Toffel:

Yeah, why start in the US?

Luciano Bueno:

Because it's close to home. If things go bad, you're just literally knock on the next door. You don't have to get a flight, go there, figure out what is happening. Just the innovation cycle takes so long for a startup like us, it's not practical.

Mike Toffel:

So what products do you think we’ll first be able to see GALY fibers appear in?

Luciano Bueno:

I would say medical cotton applications for sure. I think it's really cool if we could do a dollar bill made off cotton. I really do. And it's a great pitch, right? You're printing money, but for investors it's great. But I would say definitely medical cotton application and the fastest possible to textiles, which is one of our biggest goals.

Mike Toffel:

Right. Great. Let's turn to some advice. So you've been working in entrepreneurship and climate tech for a while now. For the listeners who are interested in getting into climate tech entrepreneurship, what do you recommend? What do you know now that you wish you knew several years back?

Luciano Bueno:

I would say a few practical tips. First one is go out with people who you never thought you would go out with. Get out from your traditional group of friends because they're all thinking the same way. You probably work together in the same company or you're in the same space. Everybody's thinking the same way. So if you're in a business or a lawyer, go out with artists that open up your mind to possibilities that you didn't think it was possible. So I've done that a lot and it helped me to think differently about certain things. So that's one practical tip. I think the second is don't take too long to take the leap of faith if you're trying to... I feel that a lot of very smart people, they analyze so much that they never make a decision. And you may not have all the answers. You probably are wrong the majority of the time, but if you keep just thinking and thinking and trying to find the perfect solution to take an action, you'll fail. So take action. Let's see, that's the second one. And the third practical tip is be welcome of the negative energy. Transform that negative energy in... I don't know if this is the best way to say, but gasoline for you. A lot of people will tell you, "That will not work, I've been doing this for X amount of years. That makes no sense. I don't think this will be scalable." All of that, grab that energy back to you. Try to understand why or why do you think this way? Great. Let me take note of that, and then use that as your guidebook. So you're answering all their questions, why this will not work. So they're doing the job for you. It's great. They're actually working for you for free the majority of times. So try to absorb that negative energy and transform it to fuel for you. I think that's pretty powerful.

Mike Toffel:

Great. Well, Luciano, thank you so much for joining us here on Climate Rising. A really interesting conversation.

Luciano Bueno:

Absolutely. Thank you so much.

Mike Toffel:

Best wishes on your adventures with GALY.

Luciano Bueno:

Thank you. Thank you.

Mike Toffel:

That was my interview with Luciano Bueno, founder and CEO at GALY. This was our fourth episode in our series on decarbonizing the roots of value chains. If you haven’t yet, check out our prior episodes on green concrete, green steel, and regenerative agriculture.