Vietnam-based genetic testing firm Gene Solutions is in talks to raise $20 million in a new funding round, and has roped in KPMG Vietnam as its deal advisor, according to a top executive of the firm.
If talks fructify, it could mark the first private equity-backed investment in the Vietnamese genetics industry, according to DealStreetAsia’s data.
Gene Solutions bagged a seven-digit US dollar financing from a slew of undisclosed institutional investors in late 2019, its co-founder Nguyen Hoai Nghia told DealStreetAsia.
“Vietnam represents a great opportunity for genetic testing, but it has been costly for local consumers as they have had to depend on overseas technologies. We aim to provide comprehensive genetic solutions at much lower costs,” he added.
Founded in January 2017, Gene Solutions runs a few labs wherein it develops cell-free DNA-based technology and solutions in-house. To date, the company claims to have performed over 100,000 genetic tests and has gathered a mutation database of 17 inherited diseases and cancer, along with over 70,000 shallow whole genome data.
While its offerings have primarily been genetic tests in disease diagnostics, cancer targeted therapy and reproductive health, the company hopes to use the new funding to expand its reach to customers.
A significant part of the funding will be used to explore entry into other Southeast Asian markets that face similar structural issues as Vietnam, Nghia added.
Genetic testing providers in Vietnam are mainly distributors of overseas technologies, with some only offering DNA testing for family reunification, such as Genotech and Gentis.
“There is a lot of room for us to grow, considering Vietnam’s sizeable market of about 40 million people with an average income of $500 per month who are willing to pay for our services,” Nghia said.
While conventional prices for this type of genetic tests are in the range of $1,000-1,200, the company claims to offer them at about $100-150.
Gene Solutions claims it has brought down the costs of genetic testing in Vietnam up to 10 times compared to four years ago.
Nghia said the firm has witnessed strong revenue growth since its first commercial launch, from $1 million in 2018 to $4.5 million in 2019. He estimated 2020 revenue at $9-10 million.
Funding in genetic companies
|Cipher Gene||China||Pre-Series A||Undisclosed||CS Capital, Shanghai Sova Investment, Everest Venture Capital.|
|Korro Bio||United Kingdom||Series A||$91.5M||Wu Capital, Qiming Venture Partners, Atlas Ventures, others.|
|MGI Tech||China||Series B||$1B||IDG Capital, CPE, New Economy Fund, Huatai Investment, TI-Capital, others.|
|Singlera Genomics||China||Series B||$152.6M||CICC Capital, DT Capital Partners, Fu Rong Investment, others.|
|EdiGene||China||Series B||$67M||3H Health, Sequoia Capital China, Alwin Capital, others.|
|MedGenome||India||Series D||$55M||LeapFrog Investments, Sequoia Capital, others.|
|SOPHiA GENETICS||Switzerland||Series F||$110M||aMoon, Hitachi Ventures, Credit Suisse, The Pictet Group, others.|
Genetic testing in Asia has seen most of the deal flow into more advanced markets such as China, Japan, South Korea and India. Last year, businesses that raised capital include Cipher Gene, Singlera Genomics and EdiGene Inc in China, and MedGenome in India, among others. Closer home, Singapore-based Gero and Nalagenetics are amongst startups that have received private investments.
Asia Pacific genetic testing market will exhibit a 15% CAGR until 2026, spurred by the region’s rising disposable income, according to a recent research by GMInsights. In 2019, the region’s market value stood at $1.6 billion.