Difficulties in getting Covid-19 vaccines from the US and Europe to Africa mean that it’s more important than ever for the continent to be capable of breakthrough research in biotechnology and medicine. While that reality may still be years away, new investment into one of the continent’s most ambitious health-tech companies could help lay necessary foundations.
54gene, the genomics research startup, says it has raised $25 million in a Series B round led by venture capitalists Cathay AfricInvest Innovation Fund. Some existing investors like Adjuvant Capital, KdT Ventures, and Ingressive Capital put in new money too.
Abasi Ene-Obong, 54gene’s CEO, says the new capital will advance plans for “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.”
What is 54gene?
Founded in 2019, 54gene is often tipped as an African startup to watch.
But $25 million is a lot of money for a non-fintech African venture, and while fintechs usually start operating, and potentially making money immediately, 54gene is inventing for future consumers.
Given this is its third raise in three years, it is worth asking what the company has achieved so far, big dreams notwithstanding.
An African lab for whole human genome sequencing
54gene earned plaudits in January when it opened a lab in Lagos that’s capable of human whole genome sequencing, the first such facility by a private company in Africa.
The company tells Quartz its biobank has five times the capacity for sample collection than it had 12 months ago, and that it now generates revenue from its diagnostics operations, which wasn’t the case at the beginning of 2020.
Most of its work remains in Nigeria but 54gene agreed a partnership this month with the Tanzania Human Genetics Organization to promote genomics research through two projects: the Tanzania Human Genome Variations Study, and the Tanzania Rare Diseases Initiative.
The underlying motivation for these projects is that Africa remains far behind other parts of the world on genetics research. Only 2% of data used in available genome-wide association studies are of African ancestry, alongside the fact that less than 1% of global drug discovery occurs on the continent. Yet, African genomes are the oldest and most diverse in the history of humanity.
Original drug discovery plan needs expert talent
Besides money, the other factor critical to drug research is talent, a rare resource in Nigeria, with doctors and pharmacists leaving the country in droves.
54gene says it successfully recruits and trains talent for the data pipeline that informs its drug discovery efforts. To lead strategy however, it is going for experienced hands from global pharmaceutical companies. Two major hires—vice presidents for genomics and data science, and for drug discovery—join with experience from Regeneron and Novartis respectively.
Maya Horgan Famodu, founder and CEO of Ingressive Capital which backed 54gene from its earliest days, believes the upgraded team is “well-equipped to execute on the business and its new expansion.” The company wouldn’t divulge those expansion plans, but says it hopes to start in three African countries by the first quarter of 2022.
The global drug discovery market is estimated at $20 billion with potential to grow by 12%. Africa hardly has a spot on the landscape currently dominated by Pfizer, Merck, Bayer and similar companies, but perhaps not for much longer.
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