A $40 Billion Opportunity in Cotton?

Jeff Siegel

Written By Jeff Siegel

Posted August 8, 2023

If you’re a regular reader of these pages, you know I’m incredibly bullish on cultivated meat and cellular agriculture, as this is the kind of technology that will allow the world to not only survive, but thrive in a post-carbon world where conventional agriculture will struggle to exist in a cost competitive manner. 

But this isn’t just about creating food in a lab.  

With cellular agriculture, we can also create non-food crops, such as bamboo for construction and cotton for fiber.  The latter is actually something I’ve been very interested in as the production of cotton is incredibly water-intensive, with estimates showing that it takes about 5,280 gallons of water to produce just 2.2 pounds of cotton. 

This does not bode well for the future of this $40 billion global industry in a world where extreme droughts, floods and heat waves are becoming the new normal. 

So I was pleased to learn that last week, Galy (a Boston startup producing cotton from plant cells) inked a deal with Suzuran Medical Inc. to use Galy's lab-grown cotton in its products.

If you’re unfamiliar, Suzuran Medical is one of the largest manufacturers of surgical cotton in the world. And its new deal with Galy has Suzuran using Galy’s lab-grown cotton in a 10-year, $50 million partnership. 

This is not trivial, and really bolsters a bullish case for this kind of cell-based cotton production, which uses about 80% less water than conventional cotton production, requires no pesticides, and can be produced year-round.  Galy's cotton can also grow ten times faster than conventional cotton.  

From an investment perspective, this is pretty much a no-brainer at this point.  Especially when you take a look at some of Galy’s early investors, which include John Doerr, Chairman of Kleiner Perkins (net worth: $12 billion), Sam Altman, former president of the Y combinator (net worth: $250 million), and Tim Draper, founder of Draper Associates with $5 billion in capital commitments (net worth: $1.2 billion).

These guys aren’t really known for making bad investment decisions. 

Unfortunately for retail investors, Galy is not publicly-traded, although you can get some exposure to Galy through Agronomics (OTCBB: AGNMF), which was an early investor in the company.

But definitely keep a close eye on Galy.  This outfit is onto something big, and I honestly wouldn’t be surprised to see the company become a very attractive acquisition target for a number of agriculture, textile and materials companies, or manufacturers that are heavily reliant on cotton.   These include, but are not limited to …

  • Albany International (NYSE: AIN)
  • Culp Inc. (NYSE: CULP)
  • Unifi, Inc. (NYSE: UFI)
  • Hanesbrands, Inc. (NYSE: HBI)
  • Archer-Daniels-Midland: (NYSE: ADM)

You can read more about Galy here: https://galy.co/

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