African genomics startup 54gene lays off 95 as COVID testing enterprise struggles – Thealike
African genomics startup 54gene has laid off 95 staff, or about 30% of its LinkedIn-sourced 290+ staff. An organization’s spokesperson confirmed the news after sources knowledgeable Thealike of the layoffs final week.
Founded in 2019 by Dr. Abasi Ene-Obong, the three-year-old startup seeks to deal with the hole within the international genomics market the place 2% of genetic materials utilized in pharmaceutical analysis is African. This is regardless of stories saying Africans and folks of African ancestry are extra genetically various than all different world populations mixed.
As one among Africa’s most audacious initiatives, 54gene has acquired monumental backing from the likes of Y Combinator, Adjuvant Capital and Cathay AfricInvest Innovation Fund (CAIF) and several other traders who’ve invested $45 million within the firm, together with a $25 million Series B final September; a big chunk of this funding goes into the startup’s biobank (which now has a capability of over 300,000 samples) and lab testing facilities.
In 2020, 54gene noticed a chance to make further income through the pandemic because it turned its lab capabilities and re-positioned itself to conduct COVID-19 testing, which spiked in Africa when the corporate closed its Series A spherical. It was a giant a part of the corporate’s operation; sooner or later, 54gene was one among Nigeria’s largest suppliers of COVID testing.
However, with the numerous decline in assessments, many 54gene staff recruited in relation to COVID operations needed to be let go, the corporate’s spokesperson mentioned. Multiple enterprise capabilities supporting the COVID enterprise line, together with labs and gross sales departments, have been affected. The digital winding down of that enterprise line led to redundancy in these capabilities, alongside information entry and pattern assortment officers who have been contract workers. Other operational and expertise jobs have been affected as effectively.
“Like so many others navigating this current market situation, we are not immune to having to make adjustments to headcount and our financials, in order to remain competitive within the market,” mentioned the spokesperson, including that the corporate carried out the workers discount on August 18.
The firm’s spokesperson additionally acknowledged that 54gene will present affected staff with statutory assist, in compliance with native rules, and in some situations, the biotech startup will present extra severance pay, in addition to medical health insurance protection prolonged for a complete of three months.
Layoffs have change into the norm as rising rates of interest and an prolonged bull run that swept throughout personal and public markets over the past couple of years, amongst different components, mix to make life troublesome for tech corporations. Amidst recession fears, traders are being stringent with their cash, primarily towards growth- and late-stage startups. As a consequence, startups have needed to reduce prices and trim down workforces to outlive; those that have had some success elevating capital have needed to alter to pre-pandemic valuations.
54gene joins a rising record of African startups which have needed to resize their workforce in a bear market regardless of elevating tons of money inside the final 18-24 months. Some of the opposite corporations embody Vezeeta, Swvl, Marketforce and Sendy.