54gene: Nigerian Health Tech Startup Shuts Down Despite Raising $45 Million in Three Funding Rounds
54gene, a Nigerian health tech research services and development company startup, unlocking the African genome to fuel genetic research and development that may lead to discoveries has shut down operations.
The health tech startup wound down operations after successfully raising $45 million in three funding rounds.
To stay afloat, the company said in a statement released on October 25, 2022, that it is returning to a lean structure, shedding close to 90% of its employees.
It also took a u-turn back to its core value proposition which is conducting genomic research, and building biodata that would be used for precision medicine for Africans.
After embarking on a series of layoffs with plans to restructure the company across several departments and geographies, unfortunately, the company could not continue to operate financially and began to wind down, until its final shutdown. By September this year, its website was no longer available.
Founded in 2019, 54gene was launched by Dr. Abasi Ene-Obong to address the significant gap in the global genomics market.
Even though Africans and people of African ancestry are more genetically diverse than all other world populations combined, as a result, 54gene noticed that pharmaceutical research and development is lacking the diverse data that may hold the key to medical discoveries and new healthcare solutions.
The startup was launched to provide essential genomic data specific to African populations. The company sought to bridge the significant gap in the global genomics market by supplying African genetic material for drug discovery procedures.
The company’s promises were so remarkable that in July 2019, barely 7 months after launch, it got a $4.5 million seed funding from several high-profile investors including Combinator, Fifty Years, Better Ventures, KdT Ventures, Hack VC, and Techammer.
In April 2020, it raised $15 million in a Series A round led by Adjuvant Capital, an investment fund for life science technologies backed by the Bill & Melinda Gates Foundation.
In 2021, 54gene branched into diagnostics and set up 7RiverLabs due to its success with COVID testing, which saw it rake at least $20 million in revenue from COVID testing.
It worked closely with the government, raised $500,000 in funding from corporate partners to ramp up testing, created supporting roles for the vertical, and hired lots of hands.
However, in less than four years, the company experienced internal disarray, resulting in changes in the CEO position. Co-founder Ene-Obong, who played a pivotal role in securing funding, resigned as CEO and subsequently launched a new biotechnology firm focused on genetic analysis and precision medicine.
Since the closure of 54gene, the company has been actively searching for buyers to take over its assets, however, there are reports that it is faced with legal issues which will complicate the sale, amid claims that several creditors remain unpaid.
