African genomics startup 54gene has laid off 95 employees, about 30% of its 290+ employees it found on LinkedIn. A company spokesperson confirmed the news after multiple sources told TechCrunch last week.
In the year Founded in 2019 by Dr. Abbasi Ine-Obong, the three-year-old startup seeks to address the gap in the global genomics market, with less than 3% of genetic material used for drug research in Africa. This is despite the fact that Africans and people of African descent are genetically as diverse as the rest of the world’s population.
As one of Africa’s most daring projects, 54gene has received significant support from Y Combinator, Adjuvant Capital and Cathay AfricInvest Innovation Fund (CAIF) and several other investors who have invested $45 million in the company. ; Much of the company’s investment goes into biobanks (which now have a capacity of over 300,000 samples) and laboratory testing centers.
In the year In 2020, 54gene saw an opportunity to generate additional revenue amid the pandemic, turning over its laboratory capacity and reorganizing itself to conduct Covid-19 testing, while the company closed its Series A round in Africa. It was a large part of the company’s operation; At one time, 54gene was one of Nigeria’s largest covid testing providers.
However, due to a significant reduction in tests, many 54gene employees employed in connection with the Covid operations had to leave, a company spokesperson told TechCrunch. Several business functions that support the Covid business line have been affected, including the laboratory and sales departments. The virtual collapse of that line of business led to the reintroduction of data entry and sample collection officers with contract workers on these tasks. Other operational and technological activities were also affected.
“Like many others navigating these current market conditions, we are not exempt from making adjustments to our headcount and finances to remain competitive in the marketplace,” said a spokeswoman. The company implemented the layoffs in August. 18.
A company spokesperson also said 54gene will provide statutory support to affected employees, subject to local regulations, and in some cases, the biotech startup will extend additional severance pay and health insurance coverage for a total of three months.
Layoffs have become commonplace as rising interest rates, an extended bull run in private and public markets over the past two years, and other factors have combined to make life difficult for tech companies. Amid recession fears, investors are turning their money, primarily to growth and late-stage startups. As a result, startups had to cut costs and reduce staffing to survive; Some successful capital earners had to adjust to pre-pandemic speculation.
54gene joins the list of African startups that have had to downsize their workforce in a bear market despite raising several million dollars in the past 18-24 months. Other companies include Swvl, Vezeeta, Wave, Sendy and Marketforce.
