A Federal Excessive Courtroom in Lagos has granted an injunction blocking the sale of 54gene’s belongings, stopping the dissolution of what was as soon as considered one of Africa’s most promising startups, in response to court docket paperwork seen by TechCabal. Belongings slated on the market included the biodata of 100,000 Nigerians priced at $3 million.
In a petition filed in July 2025, Dr. Abasi Ene-Obong, 54gene’s founder, accuses the corporate’s largest buyers, the Cathay AfricInvest Innovation Fund and Adjuvant Capital, of orchestrating its collapse.
He alleges they sidelined the startup’s board and made selections on behalf of 54gene, rejected a $110 million rescue bundle, threatened to unfold rumours of a fraud investigation in opposition to him, pressured the Nigerian working firm out of business, and rejected his supply to purchase them out.
“At 54gene, our mission—to harness African genomic insights for higher well being—rests on the very best requirements of ethics and neighborhood belief,” Ene-Obong stated in an announcement to TechCabal. “We must always maintain ourselves accountable to each examine participant, enterprise companion, investor, creditor, and the broader communities we serve.”
The case marks some of the dramatic unravelings of a high-profile African startup, elevating questions on investor management and founder rights. As soon as valued at $170 million and backed by outstanding buyers, 54gene shut down in 2023 in a cloud of controversy over inner energy struggles, failed fundraising, and disputed governance.
“We’re unable to touch upon particular issues that can be addressed through the court docket system,” stated an Adjuvant Capital consultant. “Nevertheless, we solely act in the very best pursuits of our companion firms. As an influence funding agency targeted on international public well being, our precedence can also be to work with native companions to make sure the security and viability of the biobank such that it stays accessible for the good thing about Nigeria and the broader African continent.”
Cathay AfricInvest Innovation Fund didn’t reply to requests for feedback.
After a major drop in income—because of the drop in demand for COVID-testing—the buyers insisted that 54gene elevate a $100 million Collection C spherical in April 2022, refusing Ene-Obong’s recommendation for a bridge spherical. Inside a month of fundraising, it grew to become clear that the startup couldn’t elevate the funding because of the fixed and sharp drop in its income post-COVID.
Ene-Obong claims that he secured a $200 million pre-money valuation and $80 million in funding commitments, however the firm’s board blocked funding and despatched an e mail asking him to cease fundraising for 54gene. The accused buyers, who each sat alongside Ene-Obong and three impartial administrators on 54gene’s board, then appointed a Lagos-based lawyer because the receiver of 54gene Nigeria.
He alleges that he was pressured to resign as CEO by the buyers, who additionally pressured the corporate’s valuation from $170 million to $50 million and demanded 4 instances their authentic funding again earlier than any proceeds from a liquidity occasion, guaranteeing their mortgage to the corporate. The board additionally refused to permit exterior funding till 54gene obtained follow-on capital from their companies, shut down revenue-generating enterprise traces, blocked a $500,000 contract, and took over the corporate.
54gene had three impartial administrators, with Ene-Obong because the frequent director, and Cathay AfricInvest Innovation Fund and Adjuvant Capital as most popular administrators, finishing the board.
How the cracks at 54gene began to seem
When 54gene raised cash from buyers, they received fairness in 54gene Inc., the U.S.-incorporated holding firm, which owned 99% of 54gene Nigeria, its Nigerian working subsidiary, whereas Ene-Obong owned the opposite 1%.
Ene-Obong claims that after his resignation in October 2022, the buyers transferred all of the belongings and mental property into the Nigerian subsidiary so they might unload the belongings with out correct accountability or oversight. Adjuvant and Cathay AfricInvest mixed personal 29.4% of the startup and management the corporate following Ene-Obong’s exit.
Adjuvant led 54gene’s Collection A spherical in 2020, however a couple of weeks after agreeing to a $60 million valuation, it instructed Ene-Obong {that a} restricted companion in its agency determined that the deal ought to solely proceed at a $50 million valuation. Ene-Obong agreed. Two weeks earlier than signing the contract, the agency once more lowered its valuation to $30 million, buying 22 % of 54gene as a substitute of 15 %.
Cathay AfricInvest led 54gene’s $25 million Collection B spherical the next 12 months for 4.77% of the corporate, whereas Adjuvant participated within the Collection B spherical and received 2.66% of the corporate. Ene-Obong claims that Cathay AfricInvest nonetheless owes 54gene $1 million.
54gene’s issues started in 2022 after the COVID-19 vaccine grew to become widespread and a enterprise pivot to superior molecular diagnostics failed. This double whammy led to a drop in income, forcing the corporate to boost cash to outlive.
Ene-Obong claims that after his resignation, he secured $35 million, however it was additionally turned down. As a substitute, the board requested that 54gene be acquired for $6 million, break up equally between money and inventory.
By September 2022, with 54gene’s runway virtually exhausted, the board offered a mortgage facility to 54gene with circumstances that included a brand new board chair and that solely Adjuvant and Cathay make investments at a $50 million valuation, however with a 4× liquidation choice. Widespread shareholders would additionally lose veto rights, giving Adjuvant and Cathay the ability to pressure a sale.
The mortgage would additionally rank as essentially the most senior debt of 54gene and could be secured in opposition to all of 54gene’s belongings, together with the biobank and mental property. The corporate agreed when Ene-Obong was nonetheless CEO, as he resigned the next month.
After Ene-Obong left the corporate, the buyers took management of the corporate with a supervisory committee that operates above the board. When it grew to become clear that the mortgage wouldn’t come by way of, Ene-Obong stated he was requested to organize a buyback supply for 54gene for $3 million.
Ene-Obong’s proposal was initially accepted however later rejected after he refused to wire $100,000 in money inside 24 hours to an investor who claimed it was wanted for authorized prices, threatening to pressure the corporate out of business in any other case. Following the standoff, the reconstituted board moved to promote 54gene’s belongings, a choice that dangers inserting the delicate genomic information of Nigerians within the fingers of the very best bidder and raises critical nationwide safety considerations.
How did 54gene get right here?
Launched in 2019, 54gene got down to shut a niche in international medical analysis by offering medical researchers with DNA information from individuals of African ancestry. On the time, 98% of the world’s genomic information got here from non-African populations, regardless of Africans being essentially the most genetically various inhabitants on Earth.
Its ambition was daring, and buyers shortly took discover. Simply fifteen months after launching, 54Gene raised over $19 million throughout three rounds from early backers like Microtraction, Y Combinator, Ingressive Capital, and Future Africa. These buyers have been betting on the corporate’s capacity to show Africa’s genomic variety information right into a high-revenue enterprise by offering the muse for breakthroughs in analysis, illness prevention, and drug improvement.
On the top of Nigeria’s COVID-19 response, 54gene deployed cell testing labs that helped scale the nation’s day by day testing capability from 100 to over 1,000. This pivot into diagnostics drove a pointy income uptick and positioned 54gene to experience the worldwide biotech funding wave throughout the pandemic. Past COVID, the corporate constructed a biobank by sequencing the genomes of 100,000 Nigerians throughout 300 ethnic teams and developed over 40 proprietary software program instruments for genomic information evaluation.
54gene raised over $45 million throughout three funding rounds, helped Nigeria survive COVID, efficiently created a biobank that may change how African drugs works, and remodeled $20 million in income, however in the end, inner disputes between its founder and board led to its demise.
The case continues to be in court docket and is awaiting judgment.
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