Genobank: Looking to Remake the DNA Kit Market
The main focus is on building a system that is about privacy of your DNA
Genobank.io, a startup that is developing a secure DNA kit, is currently raising a round of capital though the Republic crowdfunding platform. So far more than $325,000 has been raised from more than 1,000 investors. The valuation is set at $10 million.
The founders include Daniel Uribe, who is the CEO, and Everardo Barojas. Uribe is a serial entrepreneur and has worked at companies like Sun Microsystems. Some of his areas of expertise include cybersecurity, blockchain, and cloud computing. He also has a degree in electrical engineering and an executive MBA from Stanford GSB.
As for Barojas, he is a PhD candidate and has a computer science degree. His main focus at Genobank is on the technology side, such as with the development of the RexChain fork for encrypted data.
Let’s get a backgrounder on the startup.
Genobank’s Background
Over the years the power of biotechnology has become more available to the general public. A prime example of this is the growth of the market for DNA tests, led by companies like 23andMe and Ancestry.com. While these are certainly valuable, there is a nagging issue: You are actually forfeiting ownership of your DNA. This means that it can be shared and sold to third parties like Pfizer (NYSE:PFE), Procter & Gamble (NYSE:PG), and GlaxoSmithKline (NYSE:GSK). It’s a lucrative business.
How much of a problem is this? Well, according to a study from KPMG, about 65% of those who are interested in taking a DNA test have worries about privacy.
This is where Genobank.io comes in. The company is developing DNA kits with a privacy-first focus. The ownership is completely in your control. This is accomplished through sophisticated use of blockchain technology and algorithms to anonymize your DNA data, which is stored in a so-called encrypted “DNA Wallet” (there are three patents pending on the overall process). Only you can access it with a private pin code.
In other words, this provides complete control on where you want the DNA to go, such as for a clinical trial.
Though your DNA will be sent to a lab, Genobank.io says it will provide certification to make sure the privacy policies are upheld. Each test tube has a unique QR code for your DNA Wallet. Currently, Genobank.io is working with Oasis Labs, which has its own blockchain platform (the company is also an investor).
In terms of traction, there are more than 400 users and over 20 are from the founders’ family members. The users have mostly come through a partnership with the chain of RIO health clinics. The goal is to get at least 2,000 users by the end of this year.
Then what is the business model? It’s a blend of direct-to-consumer sales and revenue sharing arrangements with organizations like clinics and hospitals (this may involve the use of a white-label version of the DNA kit).
Bottom Line
Genobank.io is raising capital with a crowd SAFE (Simple Agreement for Future Equity) instrument. This means that the investor does not receive shares until there is a “trigger event,” such as an acquisition or IPO (the minimum investment is $100).
There are also perks that are based on how much you invest. For example, if you sign up for $1,000, you get a private conference call with the CEO, a T-shirt and a DNA kit/genotype (a $199 value). Or, if you invest $15,000, your family (three members) will get a CLIA certified whole genome sequence of data as well as a dinner with the CEO in San Francisco.
There are definitely risks with the investment. First of all, it is far from clear how many people would be interested in a blockchain-based DNA test kit. There would also need to be significant amounts for marketing to raise awareness of the concept. And finally, the company is fairly small, with only two employees.
So as is the case with any early-stage investment, it’s important to do your own due diligence and keep in mind the need for diversification with your portfolio.
Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.