Recently, Trautec, a Chinese recombinant collagen company, previously invested in by Shiseido and L Catterton under LVMH, has signed an advisory agreement with CITIC Securities. It was filed with the Jiangsu Securities Regulatory Bureau on January 8th, aiming to go public on a stock exchange in China. The initiation of the IPO plans for this enterprise, favored by beauty industry giants, indicates the rapid growth in the recombinant collagen market.
The leading player in recombinant collagen was established less than 10 years
Jiangsu Trautec Medical Technology Co., Ltd. (Trautec), as indicated on its official website, was established in 2015 as a technology-driven enterprise focusing on the research, development, production, and sales of innovative biomaterials and novel protein/nucleic acid drugs. Trautec has long been committed to the field of life health new materials, particularly in injury repair, tissue regeneration, and related areas.
In 2016, Trautec initiated the research and construction of a recombinant collagen project and its factory. The following year it marked the trial production of recombinant collagen. By 2020, Trautec completed the pilot production of Type I and Type II recombinant collagens, achieving mass production capabilities. In 2023, its Type III small-molecule recombinant collagen officially entered mass production and is specifically intended for use in the cosmetics industry.
Trautec adheres to an integrated approach involving industry, academia, and research in its R&D endeavors. The company asserts that its core product is recombinant collagen for biomedical materials. Additionally, Trautec has established collaborative laboratories and research institutes focused on recombinant collagen with institutions such as The Chinese University of Hong Kong, Sichuan University, Shenzhen Bay Laboratory (Pingshan Center), and Changzhou University, among others. They have also partnered with scientific research institutions including the Jiangsu Postdoctoral Innovation Practice Base and collaborated with several large tertiary hospitals such as Changhai Hospital and the Ninth People’s Hospital of Shanghai to conduct clinical research, aiming to foster an innovative hub in the synthetic biology industry.
Trautecl’s business is divided into three segments: Biomaterials, Medical/Cosmetic Products, and ODM.
In the Biomaterials segment, Trautec has successfully conducted large-scale production and achieved standardization of recombinant Type I, II, III, and XVII collagens, and small-molecule collagens. It’s understood that Trautec is the world’s first enterprise to independently research and mass-produce Type XVII collagen.
Within the Medical/Cosmetic Products sector, its key products include medical dressings and protein gels under the prominent brand “See Sense.” Trautec has developed two categories of medical devices covering functions such as skin repair, scar repair, oral mucosa repair, and wound healing. Additionally, three types of medical devices, including recombinant collagen implants, recombinant Type III collagen freeze-dried fibers, absorbable repair dressings (skin scaffolds) made from recombinant Type III collagen, and bladder repair agents made from recombinant Type III collagen, have entered clinical applications.
Regarding the ODM business, Trautec, grounded in independent research and development, has achieved large-scale, standardized production of recombinant Type I, II, III, and XVII collagens. They’ve introduced a new customized service offering clients personalized functional material development.
In 2023, Trautec successfully included two developed materials into the International Nomenclature of Cosmetic Ingredients (INCI).
In January, Trautec independently researched and produced recombinant Type XVII collagen and was smoothly granted an INCI name, being successfully listed in the International Nomenclature of Cosmetic Ingredients. This marked the debut of Trautec’s first recombinant collagen material officially entering the international market.
In May, Trautec’s research-developed recombinant Type III small-molecule collagen was officially approved for inclusion in the International Nomenclature of Cosmetic Ingredients under the product name “ReCol3-TTA03-02SC.” Its INCI name is “sr-(sh-Polypeptide-69 Dipeptide-19).” This signifies the successful inclusion of Trautec’s second recombinant collagen material in the International Nomenclature of Cosmetic Ingredients. It indicates international recognition for the safety, reliability, and effectiveness of recombinant Type III small-molecule collagen materials.
Established in less than a decade, Trautec has begun preparing for listing, underscoring its position in the recombinant collagen market. This also indicates the increasing attention from capital markets towards the recombinant collagen industry.
Received investment from Shiseido and LVMH-backed fund L Catterton
Due to Trautec’s rapid development in the cosmetics ingredients sector, it has garnered favor from private equity investment capital and beauty industry giants. As of today, Trautec has secured two significant rounds of financing, accumulating a total of 400 million yuan in funding.
As early as September 2021, Trautec received angel funding from Tsing-Yuan Investment, although the specific amount was not disclosed.
In August 2022, Trautec completed its first round of equity financing, securing nearly 200 million yuan. The leading investor was Ziyue Fund, under Japan’s beauty industry giant Shiseido, with co-investors including Huafang Capital, CDH Investments, and Holley Pharmaceuticals. This round of funding aims to support Trautec in continually expanding its investment in technological innovation and product research and development, thereby enriching the core technologies and products in the recombinant collagen biomaterial market.
Regarding the collaboration with Shiseido China, Mr. Qian Song, CEO of Trautec, stated, “Shiseido is an international beauty conglomerate with a 150-year history, renowned for its acute industry insights, robust research and development capabilities, and outstanding management expertise, earning deep market trust. Ziyue Fund’s lead investment in this round is a robust endorsement for Trautec, accelerating our pace in research and development innovation and international market expansion. Looking ahead and pioneering in our positioning, we aim to explore broader business domains in collaboration with Shiseido, leveraging their management experience and global network to step onto a larger international stage, leading the global strategic advantage in China’s recombinant collagen industry.”
Trautec expressed that this round of financing signifies high recognition from the capital market for the achievements over the past few years and the prospects of Trautec. It is expected to inject new momentum into the company’s rapid development. Leveraging this round of funding, Trautec will continue to focus on innovative biotechnological materials, integrating resources from various parties to establish a new high ground in the industry.
Shiseido China’s investment in Trautec aims to strategically lay the groundwork for novel beauty biotechnological materials. The plan involves combining the strengths of both parties in product research and development, ingredients supply, and channel resources to explore collaboration opportunities in functional skincare products.
Kentaro Fujiwara, President, and COO of Shiseido, remarked, “As an international beauty conglomerate that entered China earliest, Shiseido has had a footing in China for over forty years, always believing in the immense potential of the Chinese market and never wavering in our confidence in investing in China. The establishment of the Ziyue Fund is a strong testament to our long-term commitment to China. As a new starting point for Shiseido to integrate local innovation, we aspire to leverage our brand management experience and research and development capabilities to focus on the hugely promising field of functional skincare. Partnering with Trautec, we aim to further propel the high-quality development of China’s beauty industry.”
On October 10, 2022, Kentaro Fujiwara, President and COO of Shiseido, and Hidefumi Araki, Chief R&D Officer of Shiseido China, along with their delegation, visited Trautec. The visiting team toured Trautec’s research and development projects for cosmetics ingredients and experimental medical device projects. Kentaro Fujiwara expressed his hope for further strengthening research and development collaboration between both parties to collectively drive high-quality development in China’s beauty industry.
At the end of July, Trautec’s International Trade Department visited Shiseido’s Global Innovation Center in Yokohama, Japan, for knowledge exchange and learning sessions. Shiseido highly acknowledged Trautec’s achievements in the development and application of recombinant collagen. Beyond anti-aging scenarios, both sides also explored new concepts in scalp care. Leveraging each other’s research and development strengths, they discussed deepening and expanding cooperation areas. Trautec stated that this visit further solidified their confidence and determination to expand into overseas markets, positioning China’s recombinant collagen at the forefront of global advancement.
On September 16, 2023, Trautec successfully closed its Series B financing round, raising over 200 million yuan. The round was led by the first RMB fund under L Catterton, the world’s largest consumer-focused private equity firm, and CLSA Capital Capital Partners, a global USD private equity platform under Citic Securities. Co-investors included CDF-Capital Investment and MingFeng Capital. This round of financing will primarily be utilized for industrialization advancement, innovative technology research and development, and expansion into international markets.
Scott Chen, a managing partner in the RMB fund of L Catterton, commented, “Trautec has demonstrated that it can develop technologies that are at the forefront of the SRHC industry and also commercialize them for practical use in products that consumers value. Impressively, it has done so in a balanced and prudent manner, quintupling revenue and growing profit over the past two years even as it continued investing in research and development to stay ahead of the curve. We look forward to working closely with its management team, supporting the company’s domestic and international expansion initiatives.”
Within a short span of two years, Trautec has accumulated a total of 400 million yuan in funding. Notably, the investors include global beauty industry giants Shiseido and funds under LVMH. From the funding perspective, the recombinant collagen market has become a focal point for capital attention. With reputable investors from the international beauty industry, recombinant collagen is poised to emerge as the next significant trend in cosmetics ingredients.
The Chinese recombinant collagen industry is experiencing rapid development
Since the breakthrough in domestic recombinant collagen technology in 2000, recombinant collagen has exhibited highly humanized characteristics, eliminating biological risks associated with animal-derived sources while retaining excellent collagen properties. As a cosmetic additive, recombinant collagen demonstrates repair, moisturizing, and whitening effects. Moreover, it boasts lower immunogenicity, improved water solubility, and high compatibility with skincare efficacy, positioning it as a significant application material in the field of functional skincare.
According to Frost & Sullivan data, from 2017 to 2022, the compound annual growth rate of the recombinant collagen market was 63%. It is projected to grow 42.4% from 2022 to 2027, with the market size estimated to reach 108.3 billion yuan, capturing 60% of the collagen market share.
Between 2022 and 2027, the compound annual growth rate for recombinant collagen skincare products is anticipated to reach 55%, surpassing hyaluronic acid (41.3%) and plant extracts (30.4%). Its penetration rate is forecasted to reach 30.5%. Collagen is poised to become one of the largest core ingredients in skincare products.
Amidst expanding market demand, several policies have been introduced to lead industry standardization and normalization, propelling the rapid development of China’s recombinant collagen industry.
On June 21, 2018, the National Health Commission issued the National Food Safety Standard – Collagen Peptide, providing detailed definitions and technical standards for collagen peptides. In March 2021, the National Medical Products Administration approved the revision of the industry standard for Recombinant Collagen and, in the same month, promulgated regulations that explicitly outlined the principles for core and characteristic terms of recombinant collagen biomaterials, guiding nomenclature through typical examples. This effectively standardized the market and alleviated confusion caused by naming conventions, thus promoting the high-quality development of the industry.
In May of last year, the Center for Medical Device Evaluation NMPA announced the Guidelines for Registration Review of Recombinant Collagen Wound Dressings and the Guidelines for Evaluation of Recombinant Humanized Collagen Ingredients, establishing unified evaluation methods and standards for recombinant humanized collagen.
With increasing industry standardization and regulation, the domestic recombinant collagen market is witnessing a diverse competitive landscape. More and more companies are entering this arena, with some leading enterprises such as Giant Biogene, Trauer Bio, and Jinbo Bio consecutively going public.
Giant Biogene, one of the world’s largest producers of recombinant collagen, went public on the Hong Kong Stock Exchange on November 4, 2022. Their recombinant collagen products are predominantly used in skincare, making them one of the first companies worldwide to mass-produce recombinant collagen cosmetics. With eight major brands under its umbrella, Giant Biogene covers diverse applications ranging from cosmetics, medical dressings, intimate care, and oral care, to scar repair. Among them, CONFIME and COLLGENE are the company’s flagship products, accounting for over 90% of revenue.
Jinbo Bio, which debuted on the Beijing Exchange in August last year, has completed foundational research on Type I, Type III, and Type XVII humanized collagen. It has been applied across gynecology, dermatology, surgery, otolaryngology/dentistry, and skin care, among other fields. Jinbo Bio aims to develop 28 types of human collagen, expediting the original development of recombinant humanized collagen.
Additionally, domestic beauty brand Marubi successfully developed stable recombinant dual-collagen, incorporating Type I and Type III collagens with an amino acid sequence identical to natural collagen. It offers advantages such as rapid absorption, effectiveness, and high safety. Marubi, with its skincare brand Marubi, has developed an extensive product range, with the latest dual-collagen series being the primary product line leveraging recombinant dual-collagen technology.
Leading domestic hyaluronic acid enterprise Bloomage is actively expanding into the collagen field. In April 2022, the company acquired 51% equity in Yikang, officially entering the collagen industry. Yikang specializes in animal-derived collagen production, primarily focusing on collagen sponges and artificial bone.
Moreover, late last year, L’Oreal’s Little Marmalade Cream launched its second-generation upgrade, claiming to have added recombinant collagen as its primary selling point. L’Oreal’s entry signifies the increasing favor of recombinant collagen by more beauty industry giants.
With the increasing standardization and regulation of domestic policies, the competition among domestic recombinant collagen enterprises has become more diverse. Foreign capital and beauty industry giants have begun strategic placements, indicating a rapid development phase for China’s recombinant collagen market.
