Alibaba-backed Prenetics in $10m swoop for London-based specialist in home DNA tests
A LONDON-BASED company has cashed in on the boom in DNA-testing kits by selling itself to a Hong Kong firm backed by Alibaba.
Prenetics, which the Chinese internet retail behemoth invested in last year, has paid $10m (£7m) to acquire DNAFit, a five-year-old company that sells tests designed to determine a person’s suitability to different diets and exercise regimes. The company sells the tests online and through employee benefits schemes for up to £249, and has sold tens of thousands of the kits.
Avi Lasarow, DNAFit’s chief executive, owns just under half of the company and will lead Prenetics’ international operations after the deal.
Demand for at-home DNA testing kits has boomed in recent years and is expected to become a $50bn market by 2026. Companies including 23andMe have seen sales boom, backed by hundreds of millions in venture capital funding.
Mr Lasarow said he had previously turned down offers for outside funding or acquisitions, having relied entirely on early investments from friends and family, but that Prenetics, which has become the market leader in southeast Asia, was the “right partner” for the company. He insisted the current swell in sales of testing kits did not represent a bubble.
“The bubble is not going to burst; it’s not the dotcom, it’s precision medicine. This market is just beginning,” he said. Mr Lasarow predicts that sales of his kits, currently in 22 countries, will hit up to £15m this year worldwide, from around £2m over the last year.
“The likes of Fitbit have educated the market; because of that aggressive marketing it’s now encouraging consumers to think: ‘What’s the next thing?’” DNA testing kits have been under scrutiny for questionable results and fears over the security of their data, but Mr Lasarow said DNAFit had been backed up by clinical studies into exercise guided by the results of its tests.
“We never oversell the science. We don’t believe genetics is everything,” he said. The firm also says it adheres to a strict ethical code of practice. Prenetics raised $40m last year in a funding round led by the Alibaba Hong Kong Entrepreneurs Fund, an arm of the Chinese shopping giant focused on investments in the City. It says it has already sold genetic tests to hundreds of thousands of people.
Its chief executive, Danny Yeung, said: “DNAFit is a pioneer in direct to consumer genetic testing and has developed a strong reputation in the industry.”