The SA founders of biotech startup 3X4 Genetics have landed $2.5-million in investment from US venture capital (VC) fund Alethea Capital Management.
Founded by Jason Haddock, the former CTO of Cape Town animation studio Sea Monster, and scientist Yael Joffe (pictured above, left and right, respectively) in 2017, the startup offers genetic tests to patients via a network of health practitioners.
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Speaking to Ventureburn yesterday, Haddock said while the deal is for $2.5-million, the startup has the option to access an additional $2.5-million at a later stage.
As part of the agreement with San Diego based Alethea Capital’s Tony Hsu, 3X4 Genetics has had to move its intellectual property (IP) and the company itself, to the US. The company will now be based in Seattle, with the Cape Town based business becoming a subsidiary of the US company.
As part of the $2.5m deal, 3X4 Genetics is relocating its IP and the company to the US
Haddock said the initial exchange control process has taken three to four months so far — far quicker than the 18 months to two years which this type of application can typically take to finalise, he noted.
He reckons things have gone faster for the startup, in part because the startup’s bank, FNB, is involved in helping complete some of the process — namely that of helping set up a US entity in Seattle, Washington and a SA subsidiary.
Once this has been concluded he and Joffe will be able to apply for work visas to relocate to the US. While he expects to be in the US by March, with Joffe joining him in June next year, he says the US office’s first staffer is already due to start working from the US office from 6 January.
At present, in the Cape Town office, the startup has 18 employees.
Earthchild founder invested R4.8m
Haddock said he and Joffe picked Seattle, when looking at the US, because unlike other states such as California, Washington state doesn’t have a state tax, making it more affordable to operate there, and why big tech companies such as Microsoft and Amazon operate from the state.
While he and Joffe had tried to source investment from South Africa, he said the move to source from the US was “definitely strategic” — as the market is far bigger for genetics tests, than in South Africa.
Haddock said the startup had come about after Yael pitched the idea to Sea Monster and he then pitched a technology solution concept to her, in late 2016.
He describes himself as being involved in crafting the user-experience, while Joffe is involved in the genetics side of things.
The following year the two pitched at genetics company Illumina’s accelerator. The startup subsequently netted an investment of R4.8-million from Earthchild founder Jared Kahn.
In June last year Joffe and Haddock began offering their genetics test service to patients via health practitioners. A month later, Haddock – who had been working part-time on the startup – left Sea Monster to devote more of his time to 3X4 Genetics.
The two then showed some contacts in the US their product, who were then able to introduce them to several high-net worth individuals. One of these was Alethea Capital’s Tony Hsu. The deal was agreed to in principle between Hsu and the pair, in July.
‘Genetics test’s unique nutrition focus’
Haddock says what differentiates the startup’s genetics test from those of competitors is that the test results focus significantly on what nutrition a patient can look at to improve their health.
In addition, results are packaged in a way so as to make it more useful for a patient looking to tackle a health issue, while bringing the patient and practitioner closer together.
For instance, the genetics test results will detail things such how well your body processes toxins, or the health of one’s heart or brain.
Distributing the test via health practitioners, argues Haddock, allows for the practitioner to take the right action to treat the patient, when necessary.
Currently the startup has over 200 practitioners in its network. Tests cost between R3000 and R6000 and Haddock estimates that the startup has run 3000 genetics test so far. The startup doesn’t run its own lab, but currently makes use of a lab based in Durban.
Tests help patients redesign their life
Haddock says the startup has four kinds of clientele, namely: healthy people who want to have a genetics test done to ensure they live a healthy lifestyle, chronically ill patients who for example have cancer, those looking to lose weight and sports people.
He singles out three examples where the startup’s test have resulted in a positive outcome from those who’ve undergone them.
For example, one woman who had Parkinson’s disease was able to regress the effects of the disease after discovering that her body was battling to deal with toxins.
Similarly, another woman who suffered from debilitating migraines was able to reduce these after discovering her body also doesn’t process toxins too well.
One patient, who long battled with weight issues even after having tried various ways to lose weight, was able to more effectively lose weight after discovering that she had chronic inflammation in her cells and that exercise was acting to put a load on her body and preventing her cells from releasing fat.
As more people look to improve the quality of their life and as tech moves increasingly to search for ways to prolong life, expect these two tech founders to be in the news soon again.
*Correction: We initially reported that the 3X4 Genetics landed a $5-million deal. It was in fact $2.5-million, with an option for a further $2.5-million at a later stage.
In addition, the accelerator mentioned by Haddock, is Illumina, not Alumina as we earlier had it.
Also, Haddock said the startup had come about after he pitched the initial idea for a genetics test offering to Joffe in late 2016. Haddock told Ventureburn subsequent to the publication of this article that it was Yael Joffe who pitched the idea to Sea Monster first. Jason Haddock then pitched a technology solution concept to Joffe.
We apologise for the errors.
Featured image: 3X4 Genetics founders Jason Haddock and Yael Joffe (Supplied)
