The company, founded in 2019 by Dr. Abasi Ene-Obong, initially raised an impressive $45 million across three funding rounds. However, it has been marred by frequent changes in leadership. In the past year alone, 54gene witnessed three CEO changes, culminating in the departure of Ron Chiarello in July 2023.

Report affirms that Chiarello confirmed the financial struggles that have led to the company’s winding down, stating that 54gene could not continue to operate financially, and it began to wind down in July.

As part of its winding-down process, 54gene is reportedly exploring options to find buyers for its assets, including a valuable biobank containing biological samples essential for research. While these assets are considered valuable, the progress of the sale remains uncertain.

However, legal troubles are complicating the closure further. Teresia Bost, the company’s former legal counsel and one-time interim CEO, has sued 54gene, alleging discriminatory behavior and a hostile work environment. These legal issues, along with claims of unpaid creditors, add a layer of complexity to the company’s already challenging situation.

Operating in the field of genomics is inherently capital-intensive, and the costs associated with sequencing equipment, data storage, and other expenses can quickly accumulate. Insiders with knowledge of 54gene’s operations have noted that the company still owes money to vendors who supplied medical equipment.

The startup expanded into diagnostics and established Seven River Labs in 2021, leveraging its success with COVID-19 testing. While it generated substantial revenue from COVID-19 testing, reports indicate that the company embarked on aggressive spending in the diagnostics space without considering market dynamics. By mid-2022, 54gene was grappling with financial difficulties, leading to salary cuts and layoffs.

The collapse of 54gene, once a flagship company in the genomics sector, is expected to have repercussions. Industry observers warn that this setback may cause global investors to hesitate when considering funding similar ventures in the future. The abrupt fall of a major player in the sector raises concerns about the sustainability of genomics startups and underscores the challenges inherent in this field.

As 54gene approaches closure amid controversy and financial woes, the industry will be closely watching its aftermath and its potential impact on the broader genomics and health tech landscape.

The following leadership changes were announced:

Ron Chiarello, PhD, has been appointed CEO after serving as co-CEO since earlier this year. Chiarello was previously founder, CEO, and Chairman of Alveo Technologies. He also founded Jetalon Solutions, Etalon Technologies, and Orion Metrology, and held research positions at Stanford University and Argonne National Laboratory.

Tobi Oke, Managing Partner of V8 Capital Partners, an African enterprise tech venture capital fund based in Lagos, Nigeria, has been appointed to 54gene’s Board of Directors. Prior to founding V8 Capital, Oke worked as the head of Intel Capital (Africa) and in leadership roles with Standard Chartered Private Equity, HSBC, and Booz Allen.

Temi Awogboro, Founding Partner of Alcent Capital and Co-Founder of Kairos Angels, and MAGIC, venture capital funds investing globally with a portfolio in Africa, will serve as an advisor and Board of Directors observer. Awogboro previously was Executive Director of TPG portfolio company Evercare Hospital Lekki and regional lead with Evercare Health Fund. She began her career at Goldman Sachs.

Teresia Bost, who served as interim CEO since last October, will remain with the company as an advisor. Bost has over 20 years’ experience in health care and has held leadership roles at Celgene, Jazz Pharmaceuticals, and Quartet Health before joining 54gene.

“We appreciate the tremendous contributions Teresia has made to the company and are enthused to have strong and experienced leaders helping move the company forward,” said Jenny Yip, Board Chair of 54gene and Managing Partner at Adjuvant Capital. “We have great trust and confidence in the vision and discipline Ron brings to his elevated role and are grateful to add Tobi’s deep investment experience and expertise in Africa to our board.”

“54gene is solving the issue of racial disparity in genomics data and paving the way for more inclusive healthcare outcomes,” said Oke. “With committed investors and partners in Africa and globally, we are solely focused on 54gene’s original mission and building a distinct and unprecedented platform in its diversity and scale.”

54gene aims to significantly improve the inclusion of data from African populations in genomics research. Most genomic data used for development research today is from Europe and North America, while less than 3% is from Africa. Increasing access to genomic data from African populations will improve the effectiveness and relevance of products to the health of African people and power therapeutic discoveries benefiting all populations.

The company’s 600,000-sample capacity biobank, which already holds 130,000 samples, is the largest commercial biobank in Africa and one of the most diverse in the world. Through its robust partner and clinical network on the continent, 54gene has access to millions of patients to support its mission. To date, the company has raised $45 million dollars from leading investors including Adjuvant Capital, V8 Capital, KdT Ventures, and Cathay AfricInvest Innovation Fund.