Since 2020, Cathay Innovation Fund — the venture sub of Paris-based private equity firm, Cathay Capital — has not relented in investing in Africa. After previously in investing South African agritech and mobility startups Aerobotics and WhereIsMyTransport respectively, the investor has gone west to Nigeria, where it has led a $25 million Series B funding round in genomics startup 54gene.
Also joining Cathay in the latest funding round are previous lead investor Adjuvant Capital as well as KdT Ventures, Plexo Capital, Endeavor Catalyst and Ingressive Capital.
“In this round we have brought in partners that keep us true to our mission of equalizing healthcare and who can help us replicate our success throughout Africa,” 54gene CEO Abasi Ene-Obong said in a statement. “We believe the world will benefit from an African global drug discovery company that leverages the deep insights found in genomics research in diverse populations and ensures true equity for the African population.”
The company raised $15 million in Series A funding a year ago and $4.5 million in seed funding two years ago.
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Since its inception, 54gene has raised more than $45 million in total.
Part of the new funds will be used by 54gene to hire and educate more personnel.
The money will also be used to develop the company’s sequencing, target selection and validation, and precision medicine clinical trial capabilities. Its spread over the African continent is also significant.
Why The Investors Invested
The company has recorded appreciable growth since its last funding.
Last September, 54gene opened its own genetics sequencing and microarray facility in Lagos, rather than relying on third-party health centers such as hospitals and sending samples abroad for analysis. This was done in collaboration with Illumina, a biotech company based in the United States.
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Since its last fundraising, the startup has grown its biobank capacity from 60,000 to 300,000 samples, getting closer to its longer-term goal of managing up to 500,000 samples, according to the CEO.
The startup also most recently partnered with the Tanzania Human Genetics Organization, and Ene-Obong says 54gene is in various stages of talks with more partners.
Apart from 54gene, Cathay Innovation’s other investment in Nigeria was in a cloud-based lending platform Migo, an investment it made two years ago in 2019.
Adjuvant Capital’s reinforcement of its 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,” the company notes.
A Look At What The Startup Does
Founded in 2019 by Dr. Abasi Ene-Obong, at its core, 54gene is focused on creating the largest biobank of pan-African DNA in the world. It is a mission that could have a crucial impact on drug development, disease detection and quality of life on the continent.
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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.
54gene Nigeria 54gene Nigeria
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