Decoding MedGenome's Genomics and Fundraising in India
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Has anyone heard of the business of deciphering your DNA ?,You heard it right, your Genes.That's the talk of the town and people are investing in that, not just in the US but in India as well.
In March 2018, San Francisco-based Genomics venture MedGenome (with labs in Bangalore, and Singapore) raised USD 10 Million in a Series C round with investment from HDFC Ltd., HDFC Life and HDFC Asset Management to complete Series C funding of USD 40 million. Now, it is worth noting that MedGenome has been in existence from 2013 and has completed Series A and Series B in addition to two Series C rounds relatively rapidly by wooing investors through intuitive business models.
In a bid to understand MedGenome’s business models, and to analyse the startup’s fundraising mechanism, Entrepreneur India interacted with Sam Santhosh who is Chairman and CEO at MedGenome.
MedGenome – Analysing the entrepreneurial spirit
“MedGenome’s unique access to Indian genomics data with clinical and phenotypic information provides insights into complex diseases than can enable drug discovery leading to personalized health care,” states Sam Santhosh.
Santhosh also added that it is MedGenome’s work; on developing genetic tests, along with launching sequencing tests in India for paediatric inherited diseases, non-invasive parental testing, Liquid Biopsy for monitoring cancer treatment, and HLA Typing for transplants; which are USPs.
“This has led to a complete transformation in genetic diagnostics in the country. For example, MedGenome’s ACTIA (Exome sequencing) has enabled paediatricians to diagnose over 5000 affected children cases which would not have been otherwise possible,” adds Santhosh.
Along with the above, MedGenome is also the founding member of GenomeAsia 100K which is an initiative to sequence 100,000 Genomes in Asia.
The Fundraising strategy
With MedGenome having raised total of USD 40 Million in its latest Series C round completed in March, Santhosh expresses optimism about the entire funding journey that the Biotechnology startup has undergone.
At this point in time, MedGenome has raised venture capital amounting to a total of USD 64 Million, over four rounds of funding. Investors backing the venture are biggies viz. Sequoia Capital, Zodius Capital, Sofina, Kris Gopalkrishnan (Infosys), Lakshmi Narayan (Cognizant), HDFC Limited, HDFC Life, and HDFC Asset Management.
Now, MedGenome’s smartness with respect to wooing the above investors lay in its ability of having developed a unique business strategy of two revenue streams viz clinical diagnostics and research services which enable cost effective collection of data along with setting up of a cutting-edge infrastructure that can generate over 1 Petabyte of data every year.
This approach is unconventional in comparison to competition as both cost-effectiveness and quality research are achieved without leading to huge cash burn rates.
“MedGenome’s vision is to become a genomics data company leveraging the unique features of the Indian population,” states Santhosh.
Technology-driven genomics models were the key to getting funded
“Our investors had the foresight to see tremendous value in our ability to decipher large amounts of complex genomics data in a reasonable time and at an affordable cost to directly benefit patients and the research community,” explains Santhosh.
He also re-iterates the fact that MedGenome’s mission which is deciphering of large amounts of complex genome data to lead to discoveries of new drug targets for pharmaceutical companies served as the icing on the cake as far as securing venture capital funds is concerned.
“The rapid advancements in sequencing technology and computing power have made it possible to use genomics for routine patient care in the clinic as well as for research purposes to understand the causes of many complex diseases at a molecular level,” iterates Santhosh.
“Sequencing a whole genome is now possible at approximately USD 1000 compared to over USD 10Million ten years ago. MedGenome was the first company to introduce these new technologies to India and is still the only company in India that can sequence a whole genome for under USD 1000.”
In summary, the resultant cost-effectiveness of MedGenome’s technology-driven business models was the highlighting factor for its investors
Way ahead for Biotechnology and Genomics startups in India – From the fundraising view point
“Once new technologies are developed they come out of Universities and then get funded by Venture capitalists and other financial institutions. Unfortunately, India had been lacking both in basic research and venture funds till recently,” observes Santhosh.
He states that with the setting up of base in India by global VCs and PE funds, opportunities for the newbies are on the rise with respect to receiving mentorship (and funding) in India.
However, specific to Biotechnology, Santhosh believes that the opportunities for investors in the sector are very few and India is still working towards developing into an ecosystem wherein quality biotech startups can be created and nurtured.
Way ahead for newbie biotech entrants
Nonetheless, Santhosh still exudes optimism and states that once these have set viable business models, then the right funds would automatically come looking for the startups.
“I would advise new entrants to leverage advances in research and cutting edge technologies in the western world and figure out how to use them to solve problems in India,” advises Santhosh.