This paper explores how new technology-based firms innovate their business models in a dynamic transitions context. Through a case study of emerging biotech firms in the European biomass and precision fermentation industries, we analyze how firms adopt fit-and-conform and stretch-andtransform approaches to the malleable boundaries of a multi-dimensional business model design space. Conceptually, our study advances this analytical framework by integrating an ecological dimension, offering a broader socio-techno-ecological perspective on business model innovation. Empirically, we find that firms stretch-and-transform the ecological boundary through circular value delivery practices. We also find that firms fit-and-conform to the markets & users boundary by focusing on low-cost value propositions. In addition, we find that technological and business model innovation are deeply interconnected, challenging prior business model design space studies treating them as more distinct. The paper adds to a growing literature that integrates firm- and system-level perspectives on sustainability transitions.