54gene, a Nigerian genomics startup that raised $45 million in three funding rounds, is shutting down.
Founded in 2019 by Dr. Abasi Ene-Obong, 54Gene aimed to enhance global pharmaceutical research by providing crucial genetic data on Africans. By July 2023, however, the company started its shutdown process. By September, its website was inaccessible, and its long-standing public relations agency confirmed that it had severed ties with 54gene.
In 2021, 54gene ventured into diagnostics, creating Seven River Labs. The project initially enjoyed success through COVID-19 testing, generating over $20 million in revenue. However, lavish spending, without considering the realities of the diagnostics space, led to dire consequences. Genomics, as a field, demands substantial capital and 54gene faced financial challenges that strained its operations. Notably, the company still owes money to suppliers of some of its medical equipment, according to sources familiar with 54Gene’s business.
The startup further plunged into disarray with several leadership transitions which started when Ene-Obong stepped down as CEO in October 2022. Ene-Obong was succeded by Teresia Bost who was also a former legal counsel for the company.
By mid-2022, it had run out of money, slashed salaries, and instituted layoffs.
From 2022 to July 2023, the company underwent three CEO transitions, including Ron Chiarello, who assumed the role in March 2023 but departed in July. Chiarello also confirmed that financial instability played a crucial role in the company’s downfall. This crisis also revealed questionable spending practices by former executives. Bost’s salary, for example, was slashed from $330,000 to $175,999 upon review, while other claims of financial insolvency emerged.
The company is now looking for buyers to take over its assets, including its biobank—a collection of biological samples that could be especially useful for research. However, legal issues will complicate the company’s closure amid claims that several creditors remain unpaid. Furthermore, Bost has filed a lawsuit against the company, alleging discriminatory behaviour and a hostile work environment with Chiarello as a defendant in the suit.
