BioCellection: Wharton Startup Tackles Plastic Pollution

Invented technology & enters billion dollar industry

“I believe what we are doing is an inevitable truth,” Miranda Wang insists. “There is no choice for humanity but to solve this problem of plastic pollution. There are other problems like climate change. But plastic pollution is a tangible problem we have the knowledge to solve.”

For nearly two decades, about 400 students at the University of Pennsylvania have formed around 150 teams to vie in the Wharton Business Plan Competition. In each of those years, the winning team has had at least one graduate student as a co-founder.

Until now.

For the first time since the competition’s inception in 1998, a team of undergraduate entrepreneurs–hardly old enough to buy their own alcohol–have won one of the world’s most prestigious new business plan competitions at a B-school.

Historically speaking, undergraduate teams at the university aren’t supposed to win — particularly not students who aren’t part of one of the world’s largest and most acclaimed B-schools in the world  Yet that’s exactly what Miranda Wang, 22, and Jeanny Yao, 21, the founders of the environmentally-focused BioCellection, did last Thursday (April 28). In the 18th version of the competition, which has produced the likes of Warby Parker, Baby.com.br, RightCare Solutions, and many others, the Canadian duo of young scientists collected the $30,000 Perlman Grand Prize by beating out first runner-up, mentoring organization, BrEDcrumb and second runner-up personal training app, WeTrain.

In addition to being the youngest team to ever win the competition, Wang and Yao also set the record for most categorical wins. The Vancouver, British Columbia natives won the Wharton Social Impact Award, the Gloeckner Undergraduate Award, the Michelson People’s Choice Award and the Committee Award for Most ‘Wow Factor.’ In the process, they scooped up a total of $54,000 in prize cash. To be sure, the two young scientists are no strangers to winning competitions at the University of Pennsylvania. All told, Wang says the team has won 22 competitions, netting more than $90,000 in investments during her four-year undergraduate career.

AN ARGUMENT AGAINST THE ZUCKERBERG-STYLE OF ENTREPRENEURSHIP

“There is a lot of voice about why you should drop out of school and do a startup,” explains Wang on a phone call with Poets&Quants. “My example is why you should stay in school and do a startup. We got free lab space at school. I got credit towards graduation for working on this research. And we got grant money.”

No kidding. In addition to the more than $90,000 in investments, the team has leveraged connections to the tune of about $240,000 in investments. What exactly Wang and Yao are doing–and why they’ve had such success since launching BioCellection a year ago–sounds akin to an advanced chemical biology lecture. They’ve essentially invented a technology that breaks down and converts plastic pollution into either nontoxic carbon dioxide water or high-end chemicals used in luxury clothing fabrics. So, the plastic bottle you lazily through in a dumpster either turns into some weird carbon-dioxide infused water or a Louis Vuitton scarf.

After building the proprietary bacterium for the technology in University of Pennsylvania labs, Wang, a cell and molecular biology and engineering major, and Yao, a biochemistry and environmental studies major at the University of Toronto at Scarborough, have filed for two provisional patents and await two years of prototype testing to fully take the technology to market. But if all goes to plan, Wang believes BioCellection will be the first company to enter a potential $13 billion marine plastic pollution remediation industry. And they will be a strong player in the $42 billion market to replace current chemical surfactants used in luxury goods with their own engineered chemicals from plastic pollution. Their double-stream business model projects $100 million in revenue by 2020.

FRIENDS SINCE 8TH GRADE MATH

Perhaps more impressive than the science, technology and business moxie behind BioCellection is the story of how it came to be. Wang and Yao first became friends in an 8th grade math class in Vancouver. Once in high school, the two took over as co-presidents of their high school’s environment club. “Environmentalism was the biggest thing we were passionate about,” Wang recalls.

The passion for environmental science only blossomed when the duo visited the Waste Transfer Station in South Vancouver as a club field trip. What they found disturbed and haunted both of them. Garbage–mainly plastic–stretched for the length of four football fields and was piled three or four stories high. While there, truck after truck came into the transfer station and dumped plastic garbage, mattresses and construction waste, Wang remembers. “My trash was there,” admits Yao. “It was really shocking and horrifying seeing the way we treat our plastic garbage.”

And that was just a small fraction. Transfer stations serve as the first stopping point for your garbage and recycling after the truck picks it up. After being sorted and compressed at the smaller stations, waste is shipped off to be incinerated, recycled, or in most instances, dumped in a heaping landfill. “What’s shocking is what the plastic looks like at that stage,” says Wang. “It’s not these nice, geometric shapes. It’s all very contaminated and mixed in and there’s no way to separate it. It was so messed up and I thought, how have I never thought about this before?”

BioCellection Co-Founders Miranda Wang (left) and Jeanny Yao pictured in 2012 with their award-winning soil bacteria. BioCellection was the first undergraduate team to win Wharton's Business Plan Competition last week. Photo by Ian Lindsay

BioCellection Co-Founders Miranda Wang (left) and Jeanny Yao pictured in 2012 with their award-winning soil bacteria. BioCellection was the first undergraduate team to win Wharton’s Business Plan Competition last week. Photo by Ian Lindsay

TAKING ON PHTHALATES

Just a high school student, Wang was thinking about it now. She began researching and uncovering the numerous ill effects plastic has on the environment and animals (including human beings). Potentially the worst of these? Plastics have been engineered to withstand nearly anything. “Plastics are so chemically inert,” explains Wang. “Plastics are so stable because we’ve gotten so good at making them for the purpose of being stable and being a reliable, moldable material.”

Indeed, research within the past decade has begun to uncover some of the realities of plastic. Americans produce about 30 million tons of plastic annually–only about 8% of which gets recycled. More than 12 million tons finds its way into oceans around the world each year. Most plastics have a lifetime of up to 2,000 years. Essentially, every single piece of plastic created is still on the planet in some form today.

Of course, scientists have also been researching ways to break down and destroy plastics for decades. The majority of the research has pointed to breaking down simpler chemicals that make up a plastic product. Wang likens the idea to a cell phone case. The main structure of a case is likely made of some sort of polymer, which, at this point in time, is nearly impossible for micro-organisms to break down–like they do an apple or other less processed and engineered waste. But, Wang explains, different simple chemicals are used to give a cell phone case a certain color, or softness, or stiffness or stretch. The most prevalent of which are called phthalates, which show up in nearly everything from cosmetic products like hair spray to vinyl window blinds to plastic food packaging. It’s safe to assume if you breath, drink water or eat food, you’ve been exposed to at least low levels of the chemical.

RESEARCHING WITH PhDs AS SENIORS IN HIGH SCHOOL

As Wang was doing this personal research, she was chosen as one of 10 Western Canada high school students to participate in the Heart and Stroke Foundation’s summer research program in Vancouver. Wang’s program coordinator for the summer saw her natural knack and interest in research and suggested she enter the Sanofi Biogenius Challenge (formally the Sanofi BioGENEius Challenge). Wang obliged and called in Yao. With free reign to research nearly anything, the two chose plastic pollution, which was still weighing heavy on their hearts and minds. Or, specifically, they wanted to see if they could find bacteria found in the natural world that would remediate simple plastics.

The two teenagers drafted an email to leading bacterial enzyme researcher and investigator, Lindsay Eltis, at nearby University of British Columbia to propose their idea and ask for advice. “Usually people who do science fairs send about 100 emails before someone gets back to them,” laughs Wang. “It took us one email. I guess it was a convincing email.”

Convincing, indeed. Eltis gave them access to his lab and two of his PhD students to mentor them. Soon, Wang and Yao were huffing it to the Fraser River after class to collect soil and water samples. Then they’d take the samples to the Eltis Lab and spend hours testing for bacteria that could break down certain plastic phthalates, which show up in nearly all plastic products. All told, they spent at least four hours a night at the lab two to three nights a week during their final year of high school. And what they found was, in fact, certain bacterias could biodegrade phthalates.

“This is a big problem, but nature is evolving to keep up with it,” Wang explains. “It’s not evolving as fast as we need it to. The bacteria can’t break down plastic like apples, but it’s a start.”

FROM SCIENTIST AND ENGINEER TO ENTREPRENEUR

Their research and presentation led to a national recognition at the Sanofi Biogeneius Challenge and earned an invitation to the annual TED Conference in Long Beach, California to present their findings. Afterwards, Wang enrolled at the University of Pennsylvania and Yao at the University of Toronto at Scarborough. Of course, the duo remained in touch, connected by their findings. Wang began researching further to figure out how to change the bit of knowledge they had into an actual solution to the original impetus of the research.

“But then I realized having a solution is not enough, you have to have a scalable solution with a high enough impact that people are going to want to get involved and engage with you,” Wang reasons. And so while her fellow biology majors were prepping for medical school, Wang began taking entrepreneurship classes at the Wharton School.

“I didn’t think that coming to Penn would make me an entrepreneur,” admits Wang. “If anything, Penn is really known in pre-professional school for turning out really good Wall Street-types.”

It was in one of those entrepreneurship classes when Wang read The Innovators D.N.A., published in the Harvard Business Review in 2009. And everything for Wang changed. “I realized at that point I’ve been bothered by this problem for years and this has to be a startup,” says Wang. “This has to be a company that actually ends up making the impact.”

‘TURNING A GLOBAL CRISIS INTO A POTENTIAL OPPORTUNITY’

Just as she did as a high school student, she called Yao. With their core technology–a genetically engineered bacterium that can eat polystyrene (one of the most common aromatic polymers used in plastic) like “our cells can eat glucose”–in place, the duo took the two-way revenue stream approach. First, BioCellection aims to offer on-site bioremediation through government, NGO and nonprofit contracts. Or, they get paid to show up on a heavily-littered beach or landfill to blast plastic. Next, is the high-end luxury route. They’ve created a way to upcycle polystyrene into an undisclosed high value material worth about $300 per kilogram. With that material, they aim to disrupt the luxury clothing supply chain by replacing harmful chemicals currently used with their upcycled material.

“What BioCellection is about is turning a global crisis into a potential opportunity,” Wang says matter-of-factly. “When people think about these big problems, they often forget the big problems are usually created incrementally. That means we can undo the problems incrementally. It’s like losing weight. It has to happen incrementally.”

Up next is a move to the BioCube Incubator in San Jose, California, a world-tour to test their proprietary technology on beaches and a Series A round next spring. Wang says they are also working to increase their business partnerships, which currently includes fashion material research with Parley for the Oceans and conversations with the Chinese government for landfill bioremediation.

“I believe what we are doing is an inevitable truth,” Wang insists. “There is no choice for humanity but to solve this problem of plastic pollution. There are other problems like climate change. But plastic pollution is a tangible problem we have the knowledge to solve.”