2. The Problem: Illiquid Biological Assets
The global cell-banking industry has grown to roughly US$5 billion, yet it remains fragmented, illiquid, and starved of the trust infrastructure that modern finance requires.
Figure 2.1 in the source whitepaper illustrates the growth of the global cell-banking, or cord blood, industry.
The first clinical use of cord blood stem cells dates to 1988, and the first public cord blood bank, NCBP, opened in New York in 1992. Today the industry includes 500+ sizeable cell banks, of which more than 98% are privately held and non-listed. Two business models dominate, and each has a structural weakness.
Public Banks: Back-End Model
Donors contribute cells and ownership passes to the public bank. Government grants historically funded processing, testing, and storage. Revenue comes later, when a hospital or patient uses a unit. An FDA-approved CBU prescription sells for approximately $50,000.
Funding has fallen sharply, leaving large inventories with no liquidity.
Private Banks: Front-End Model
Families pay approximately $3,000 up front for processing, testing, and roughly 18 years of storage, while retaining ownership. The model funds storage but offers no exit, no secondary market, and no incentive for the asset to circulate or appreciate.
The Missing Layer
Across both models, the same four capabilities are absent. These are exactly the capabilities that make an asset financeable.
| Capability | Missing infrastructure |
|---|---|
| Asset standardization | Biological samples lack consistent, verifiable standards for valuation and custody. |
| Ownership verification | There is no trusted way to prove ownership and chain of custody of a biological asset. |
| Liquidity mechanisms | Limited secondary markets and financing options leave value trapped. |
| Audit infrastructure | Immutable, auditable records for regulators and investors are missing. |
Net effect: public banks are "holding a golden bowl while begging," sitting on valuable inventory they cannot monetize, while private owners and donors have no path to realize or share in the value of the assets they hold. Billions of dollars of biological assets remain illiquid and underutilized.