Investor takeovers, governance disputes, and a $3 million biobank sale attempt are shaking the legacy of a startup once valued at $170 million.
In July 2025, a Federal High Court in Lagos granted an injunction blocking the sale of 54gene’s assets, a dramatic pause in what has become one of the most contentious legal battles in African tech. At the heart of the dispute is a $3 million valuation of the company’s prized biobank, which contains genomic data from 100,000 Nigerians. But the real story runs deeper, it’s one of ambition, power, broken trust, and the cautionary tale of what happens when control shifts from visionaries to investors.
The Genesis of 54gene
Launched in 2019 by Dr. Abasi Ene-Obong, 54gene set out to close a dangerous gap in global health research, the severe underrepresentation of African DNA in global genomic datasets. At the time, a staggering 98% of global genomic data came from non-African populations, although Africans are the most genetically diverse people on Earth.
In just 15 months, 54gene attracted early backers like Microtraction, Future Africa, Y Combinator, and Ingressive Capital. Their bet? That African DNA could drive the next wave of medical breakthroughs. Over $19 million flowed into the startup within its first year, with the promise of transforming Africa’s genetic diversity into scientific gold.
The vision was bold, timely, and ethically grounded.
Pivoting to COVID Diagnostics
When the pandemic hit, 54gene quickly pivoted. The company deployed mobile COVID-19 testing labs across Nigeria, helping raise national testing capacity from under 100 to over 1,000 tests per day. This move generated a revenue spike and helped 54gene secure more funding during the global biotech investment boom.
At its peak, the startup:
- Raised over $45 million across three major rounds.
- Sequenced 100,000 Nigerian genomes across 300 ethnic groups.
- Built a biobank and developed over 40 proprietary software tools for genomic analysis.
- Generated over $20 million in revenue.
By 2022, 54gene had emerged as Africa’s most iconic biotech startup.
When the Cracks Began to Show
Post-COVID, revenue dropped sharply. Diagnostics were no longer in high demand, and 54gene found itself navigating the fundraising desert with a much less attractive topline.
In April 2022, its major investors, Adjuvant Capital and Cathay AfricInvest Innovation Fund, demanded a $100 million Series C raise. Dr. Ene-Obong argued for a bridge round instead, believing it was more realistic given market conditions.
According to Ene-Obong’s petition filed in July 2025, this was the beginning of the end.
“We should hold ourselves accountable to every study participant, business partner, investor, creditor, and the broader communities we serve,” he said in a statement to TechCabal.
A Boardroom Coup?
The petition details a disturbing power shift:
- Investors allegedly sidelined the board, making decisions unilaterally.
- They rejected a $110 million rescue offer and reportedly threatened to “spread rumours” of a fraud investigation to kill the deal.
- They forced the Nigerian operating company into bankruptcy and refused an offer by the founder to buy them out.
- The founder was pressured to resign, and within months, all IP and assets were transferred to the Nigerian entity, now under investor control.
The lawsuit alleges the intentional collapse of the company by its major investors.
“After my resignation in October 2022,” Ene-Obong claims, “the investors transferred all assets and IP into the Nigerian subsidiary so they could sell off the assets without proper accountability.”
The board, once composed of the founder, three independent directors, and two investor reps, quickly became investor-dominated. With 29.4% ownership, Adjuvant and Cathay allegedly took control, shut down core business lines, and blocked key revenue opportunities, including a $500,000 contract.
The Biobank at the Centre of It All
Perhaps the most controversial piece of this saga is the biobank, 100,000 sequenced African genomes. Valued at $3 million, it’s now frozen under the court’s injunction.
This data represents years of ethical research and participation from Nigerians across hundreds of ethnic groups. The attempted sale of this biobank has raised serious ethical questions about:
- Data ownership in African genomics.
- The responsibility of foreign investors in safeguarding local community data.
- The limits of investor power in African startups.
54gene’s Descent: A Timeline of Power and Collapse
- 2020: Adjuvant leads Series A at $60M valuation, later pushing it down to $30M for more equity.
- April 2022: Investors demand a $100M Series C despite revenue drop.
- May 2022: Founder begins to secure $80M in commitments at a $200M valuation.
- Board blocks fundraising, asks him to stop seeking funding.
- October 2022: Ene-Obong resigns under pressure.
- 2023: The Company officially shuts down.
- 2025: Lawsuit filed, court halts asset sale.
The implications of this unravelling go far beyond one startup.
What This Case Teaches African Founders
Investor Alignment is Crucial
Even mission-driven startups are not immune to cold business calculus. Founders must align deeply with investors on vision, timeline, and control, not just capital.
Founder Vulnerability is Real
The board’s ability to block funding, remove founders, and shift assets underscores how fragile founder control can be, especially in a foreign-registered entity.
Governance Structures Need Strengthening
Startups need stronger legal protections and governance policies that safeguard against investor overreach, particularly when public health and ethical data are involved.
African Data Must Remain Protected
This case could set a precedent for how genomic and health data are treated on the continent. Selling the biobank like any other asset raises moral questions that cannot be ignored.
Investors Respond, But Stay Vague
Adjuvant Capital told TechCabal:
“We only act in the best interests of our partner companies… Our priority is to work with local partners to ensure the safety and viability of the biobank for the benefit of Nigeria and Africa.”
Cathay AfricInvest Innovation Fund declined to comment.
But their silence and the court’s injunction speak volumes.
A Cautionary Tale for Africa’s Biotech Future
54gene was supposed to be a beacon, a pan-African biotech force for good, blending innovation, ethics, and impact. It succeeded on many fronts. It sequenced African genomes, brought funding to African biotech, and proved the continent could build global scientific solutions.
But its collapse is a sobering reminder that a brilliant idea, even when ethically sound, cannot survive poor governance and investor misalignment.
This case is far from over; the lawsuit is still awaiting judgment, but already, it’s shaping discussions around data sovereignty, founder rights, and investor behaviour in African tech.
The Cost of Losing Control
54gene had the science. It had the story. It had the investors. What it lost was control.
For every African founder working on healthtech, genomics, or any high-impact venture, this is more than a court case. It’s a warning.
Innovation must not come at the expense of autonomy. And ethics must not be an afterthought in boardrooms.
The future of African science may well depend on how this case ends and what founders learn from it.
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