Helix, Competing With Ancestry And 23andMe, Raises $200 Million For Marketing War
Helix, a the consumer genetics company spun out of DNA
sequencing giant Illumina, says it has raised $200 million from venture capitalists to aid it in its marketing battle with 23andMe and Ancestry, the leaders in that space. The fundraise, which shows that Helix is able to raise large amounts of funding despite criticism of its platform, shows the renewed interest in genetics as a market by big investors.
The round was led by led by DFJ Growth, with participation from all its founding investors which include Illumina, Kleiner Perkins Caufield Byers, Mayo Clinic, Sutter Hill Ventures, and Warburg Pincus. Barry Schuler, Partner at DFJ Growth and former Chairman and CEO of America Online, will join the Helix Board of Directors. Robin Thurston, Helix's chief executive, says the company "exceeded" all of its targets in the fourth quarter of 2017 after a July launch. He says that the company, which has not done much consumer marketing yet, "certainly benefitted" from the four to five million genetic test kits that were sold in the last three months of the year, but won't give specific numbers.
Helix is different from 23andMe because, instead of just taking isolated snapshots of single letter changes in DNA using a technology called a genotyping chip, it goes the far more expensive route of using the next-generation DNA sequencing technology to sequence the code of all known genes, about 2% of a person's total DNA. But then, instead of giving that information back to people in one go, it partners with other companies that allow people to buy specific bits of information in an app store modeled on the one for Apple's iPhone. One big question about this market: would people who came in to buy a product to tell them about their ancestors from National Geographic, perhaps Helix's biggest partner, want to buy a health app from Mayo Clinic, an iffier app that gives you advice on diet (come on, where's the evidence?) or one that uses you DNA code to make you a scarf?
Thurston says so far the answer seems to be yes, and that more than 20% of customers who buy one product are buying a second. " The magical moment is not when you go buy the first product, the magical moment is when you go buy the second and you instantly get your data," he says.But are those apps delivering value? That's still an open question. Last year, Eric Topol, the Scripps Health cardiologist and genomics researcher, tweeted that it seemed possible to spend $1900 on Helix apps without getting any value. He noted apps dedicated to weight loss and nutrition, where there is no strong evidence that genetic information has any benefit.
James Lu, a Helix senior vice president and co-founder, said that he disagrees with Topol's assertion, noting that every app goes through a rigorous process of making sure they are safe for consumers to use and transparent in what they offer. (It should be noted: Helix apps have not gone through the rigorous FDA process 23andMe had to go through in reaching the market.) Lu says that scientists and consumers should remember what DNA can and can't do. The diet apps, he argues, can nudge people to eat better, with the DNA as a small but interesting facet that makes it more interesting. (For most people diet advice is similar regardless of genetics.) "I think if people are asking DNA to be a crystal ball that's a different framing than we're taking on these products," Lu says. "What we're about is helping inform people about themselves."
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