Apparently a time when the attention of the world is turning to healthcare, 54gene — a U.S. and Nigeria based startup — that collects African genetic code for use in health research and drug development has closed a $15 million Series A round, in part, to address a deficiency in these processes.
“As of the time we launched, less then 3% of all genome wide association studies globally had been conducted in Africa. There was a lack of data coming from Africans…and the diaspora,” 54gene founder and CEO Dr. Abasi Ene-Obong said.
“We are trying to address the gap that currently exists in precision medicine for people of the African continent,” Abasi further said.
Here Is The Deal
- This round of funding was led by the New York based VC Adjuvant Capital, signalling the VC’s first investment in an African startup.
- In addition to funds from Adjuvant — which itself is backed by The Bill and Melinda Gates Foundation and Novartis — 54gene is a 2019 Y Combinator alum and received follow-on funding from the Silicon Valley accelerator. This round also saw participation from KdT Ventures and Better Ventures.
- 54gene will use the funding to address the inefficiency in the collection of African genetic code for use in health research and drug development.
- With the $15 million — which brings total VC to $19.5 million — the startup will expand its biobank capabilities to 200,000 samples, with a longer term goal to manage up to 500,000. 54gene is also boosting its lab capabilities. “With this funding we are about to expand that lab so we can process actual genetic data for tens of thousands, if not hundreds of thousands of people,” said Ene-Obong.
- 54gene also plans to hire across the organization, from seeking a new VP of finance to adding additional scientists.
- The company recruits research participants in Africa through studies at venues, such as hospitals, to take genetic samples via swab or blood tests. “Participants have to give us their informed consent before any testing,” explained Ene-Obong.
Why The Investor Invested
Adjuvant Capital’s investment in the startup is not coming as a surprise as the VC targets mostly healthcare startups.
“Adjuvant’s strategy aims to drive meaningful improvements in the public health of low- and middle-income countries while pursuing top-tier financial returns. Adjuvant’s focus areas include:
a) Neglected, high-burden, and emerging infectious diseases, including antimicrobial resistance and pandemic threats
b) Maternal, newborn, and child health challenges
c) Reproductive and sexual health
d) Improving nutrition in undernourished populations in the developing world,” the VC notes on its website.
However, it should be noted that 54gene has its headquarters in the United States and its facility in Africa and this fact must have influenced, to a large extent, the VC’s investment in the Africa-focused startup.
Managing Partner Jenny Yip has since confirmed Adjuvant Capital’s lead on the $15 million investment.
A Look At What 54gene Does
- Founded in 2019 by Ene-Obong, the startup is headquartered in Washington, DC with a biobank facility in Lagos that holds capacity for 60,000 samples.
- 54gene claims to have over 300 researchers, clinicians and geneticists across Africa and a research lab in Nigeria.
- The company’s primary access to revenues is paid co-development of drugs and medicine working with pharmaceutical companies. “When the drug is in the market…and approved medicine, [54gene] and the pharma company will share revenues,” said Ene-Obong.
- 54gene plans to exert leverage over the pricing process through its practice of co-developing drugs.
“When you are a service provider to big pharma you can’t really make such a request. But when you are a development partner you co-own a significant stake of what’s being developed and have more of a say,” said Ene-Obong.
- However, the startup declined to disclose any current big pharma partners or which health issues in Africa it’s aiming genetic research toward tackling.
“I can say we will prioritize diseases that affect Africans disproportionately,” Ene-Obong said.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer