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A “Theranos” Repeat? Heathtech Company “23andMe” Raises $250M Led by Sequoia Capital

The genetics company from California has so far raised $491M.


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23andMe, Inc., a consumer genetics and research company, founded in 2006, has raised $250 million in growth financing led by new investor Sequoia Capital. The investment banking firm Allen & Company LLC served as advisor to 23andMe on the financing.

Sequoia Capital is deeply interested in genetics and precision medicine. In August 2017, Sequoia India led a $30 million round C in Indian genetic startup, MedGenome.

"23andMe is primed for growth with the only FDA [of the US] authorizations for direct-to-consumer genetic tests, and a world-class research platform powered by engaged customers," said Roelof Botha, partner, Sequoia Capital. "The scale of the data - millions of customers and growing - and the unique combination of genotypic and phenotypic information provides an unrivaled research platform for insights into human health. With its distinctive and compelling consumer value proposition, 23andMe is poised to cement its leadership position in the consumer genetics market."

Sequoia is joined in the financing by new investors Euclidean Capital, Altimeter Capital and the Wallenberg Foundation. Current investors joining the round include Fidelity Management & Research Company, lead investor for 23andMe's prior financing round, and Casdin Capital.

Sequoia's Botha will join the 23andMe Board of Directors, along with Neal Mohan, Chief Product Officer for YouTube and a Senior Vice President at Google, who joined the board in July. The financing will enable 23andMe to accelerate customer growth, continue funding its expanding therapeutics group, and invest in its crowdsourced genetic research platform, already the world's largest interactive database for genetic research.

"We have only begun to scratch the surface in direct-to-consumer genetics," said Anne Wojcicki, 23andMe CEO and cofounder. "We will continue to blaze the trail for our customers and lead the industry we've built."

The company has achieved significant product and research milestones this year:

It received the first and only FDA authorization for over-the-counter genetic health risk reports; the only genetic health tests which do not require prescription. The firm has more than 80 peer-reviewed, published genetic studies on disease and wellness, including studies on genetic associations for Parkinson's disease, schizophrenia, cognitive empathy, and melanoma, among others.

In addition, 23andMe is nearing 1 billion phenotypic data points paired with its broad genetic panel, enabling rapid discovery and study recruitment. For example, the genetic diagnostic firm recruited more than 5,000 participants recruited in one week for a genetic study on fertility while launching the largest study of its kind on major depressive and bipolar disorder and first experiential study on pain tolerance and treatment.

The financing brings the total capital raised by 23andMe to $491 million from a number of prominent technology and health science companies, strategic angel investors and venture capital firms.

Meanwhile the controversial Theranos founded in 2003 by Elizabeth Holmes has raised approximately $686 million. The diagnostic company too is based in California but specializes in consumer healthcare technology to offer clinical laboratory tests from blood samples.

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