54Gene to Shut Down After Securing $45M in 2 Years: Deep Dive Into the Facts

One of Africa's leading genomics startups, 54Gene, co-founded by Abasi Ene-Obong is wrapping up its operation. Before the firm started its full-time operation, it underwent three funding rounds in which it was able to secure $45 million in funding to finance its operation.

The company was established in 2019 with the aim of supplying quality genomic data specific to Africa, and it was focused on enhancing drug discovery procedures of international firms.

With less than 3% of genetic material used in global pharmaceutical research sourced from Africa, 54Gene aspired to bridge this significant gap in the global genomics market, TechCabal reported.

However, things didn't go as planned as the firm experienced an internal crisis, which led to the replacement of Ene-Obong as CEO of 54Gene on the grounds of misappropriation of company funds. 

It wasn't until a year after Ene-Obong resigned as the CEO of 54Gene that he launched a new startup called Syndicate Bio, another genomics company focused on genetic analysis and precision medicine.

This didn't stop there, as 54Gene had gotten three (3) CEOs in its four years of operation before it closed—Ron Chiarello, who took over Teresia Bost, was the last after assuming the office in March 2023 and stepping down in July 2023.

It became clear to the public that the company would be winding down its operation, after Chiarello made this announcement, "Unfortunately, the company could not continue to operate financially, and it began to wind down in July."

According to Business Insider, the company started the shutting down process in July 2023. Currently, the company website is inaccessible, and the public relations agency that worked with the company has disassociated itself from 54Gene.

In line with its shutdown procedure, 54Gene is seeking buyers to acquire its assets, which include a biobank that contains biological samples for research. The process of selling its assets is not certain due to unresolved legal issues and unpaid creditors.

Implications

The closure of 54Gene might not be effective due to legal issues that have not been resolved, while on the other hand, the company has issues with unpaid creditors. 

Also, Teresia Bost, a former CEO of the company, is suing 54Gene for what he called "discriminatory behaviour and creating a hostile work environment".

Industry experts are worried about the health sector following the downturn of 54Gene's role in the genomics and health tech sectors.

While some experts said that the vision of the company attracted a lot of funding at the start, the sudden closure will discourage investors from funding startups in the future due to uncertainty.