👨🏿‍🚀TechCabal Daily – 54gene shuts down

Acquisitions

54gene, a Nigerian genomics startup that raised $45 million in three funding rounds, is shutting down.

Founded in 2019 by Dr. Abasi Ene-Obong, 54Gene aimed to enhance global pharmaceutical research by providing crucial genetic data on Africans. By July 2023, however, the company started its shutdown process. By September, its website was inaccessible, and its long-standing public relations agency confirmed that it had severed ties with 54gene.

Here’s what went wrong: In 2021, 54gene ventured into diagnostics, creating Seven River Labs. The project initially enjoyed success through COVID-19 testing, generating over $20 million in revenue. However, lavish spending, without considering the realities of the diagnostics space, led to dire consequences. Genomics, as a field, demands substantial capital and 54gene faced financial challenges that strained its operations. Notably, the company still owes money to suppliers of some of its medical equipment, according to sources familiar with 54Gene’s business.

The startup further plunged into disarray with several leadership transitions which started when Ene-Obong stepped down as CEO in October 2022. Ene-Obong was succeded by Teresia Bost who was also a former legal counsel for the company. 

By mid-2022, it had run out of money, slashed salaries, and instituted layoffs.

From 2022 to July 2023, the company underwent three CEO transitions, including Ron Chiarello, who assumed the role in March 2023 but departed in July. Chiarello also confirmed that financial instability played a crucial role in the company’s downfall. This crisis also revealed questionable spending practices by former executives. Bost’s salary, for example, was slashed from $330,000 to $175,999 upon review, while other claims of financial insolvency emerged. 

What now? The company is now looking for buyers to take over its assets, including its biobank—a collection of biological samples that could be especially useful for research. However, legal issues will complicate the company’s closure amid claims that several creditors remain unpaid. Furthermore, Bost has filed a lawsuit against the company, alleging discriminatory behaviour and a hostile work environment with Chiarello as a defendant in the suit.

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Logistics

Peter Kahi is the man wearing the cape for financially embattled Sendy. 

Earlier this week, Sendy, a Kenyan logistics startup entered into administration. For the uninitiated, this means that an individual will take over the startup and provide financial recommendations as the company tries to untie itself from the financial web. 

Peter Kahi of PKF Consulting has now been tasked with the job of helping the company figure out their current financial situation. Kahi is no stranger to this role. He was an administrator in the now-defunctNakumatt supermarket in 2018, andBritania Foods Limited in 2021. Kahi, with over 25 years of experience in conducting forensic and consultancy assignments, has previously worked for Ernst & Young as a partner and for KPMG as a director.

An arduous task? Sendy’s directors have now relinquished power to Kahi as he now controls the company’s business and properties. Kahi has asked all parties owed by the company to submit such a claim in writing alongside necessary evidence to Kahi for review by October 19, 2023.

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Telecoms

MTN is battling its past.

Ahmad Farroukh, former CEO of MTN South Africa, has taken MTN to court over the non-payment of his R18.8 million ($1 million) severance pay. 

Zoom in: Farroukh, who left the company in 2015, alleged after he wrote to MTN to demand his severance pay in 2021—which he had been owed for six years. He then received a letter from MTN’s executive chairman Phuthuma Nhleko that he did not qualify for his severance due to the company’s change of policy. According to the telco, severance would only be paid if the contract is not renewed or if mutual separation occurs. Farroukh however alleges that he left the company on a peaceful note, and that MTN did not communicate the change in policy to him.

The end-of-service agreement originated from Investicom, a company where Farroukh previously worked before its acquisition by MTN in 2006. Instead of a pension plan, Investicom provided an end-of-service payment to employees who left the company. According to local media, the dispute has been going on since Farroukh left the company. Farroukh had tried to resolve the issue amicably before turning to the court.

Zoom out: Farroukh’s case raises bigger questions about corporate accountability and employee treatment. The date for the first hearing is set for October 16, 2023.

FSDH Merchant Bank has partnered with the IFC (of the World Bank) and WEAV Capital for a female accelerator and investment readiness programme for female founders. Selected startups will partake in a world-class Investment Readiness Programme designed to support high-potential female-led tech companies to raise capital. The programme will end with a Pitch Day and a $10,000 non-equity funding for the winner. Apply here.

Crypto Tracker

Source:

Coin Name	Current Value	Day	Month
Bitcoin	$26,495	+ 0.82%	+ 1.92%
Ether	$1,612	+ 1.35%	– 1.83%
Terra	$0.52	+ 20.76%	+ 26.32%
XRP	$0.49	– 0.64%	– 4.44%

* Data as of 06:45 AM WAT, September 28, 2023.

Opportunities

• Jamit is excited to announce the Hear My Voice Podcast Storytelling Contest, in partnership with Focusrite. Contestants are to record and submit an original podcast entry centred around one or more themes: Black love, joy, bloodlines, sisterhood, friendship and community. The first-place winner will be awarded $500 and the Vocaster Two Studio podcast equipment sponsored by Focusrite. Apply by October 1.
• If you are an aspiring economist entering your first year of undergraduate studies in the 2024 academic year, the South African Reserve Bank’s (SARB)  Economic Research Department in collaboration with the SARB Academy, invites you to apply for competitive SARB bursaries in the field of economics, economics and econometrics, economics and mathematical statistics and economic science. Apply by September 30.
• An opportunity is on the horizon for Zambian entrepreneurs and startup visionaries as X3M Ideas Zambia announces the X-Pitchathon to empower startups across various industries. A competition for MSMEs to win over $50,000 in prizes inclusive of brand and marketing support. Apply by September 28
• Applications are open for the Fast Forward Accelerator 2024. The accelerator provides training and resources applicable to the challenges only a tech non-profit entrepreneur knows. Through the Accelerator, you will receive a $25,000 philanthropic grant, build community among your cohort, meet dozens of mentors from the tech and social sector, and connect with people who can help you scale. Apply by September 30.

What else is happening in tech?

• 🚀Entering Tech #41 – There’s work in stock for marketing talents
• Kenya’s treasury chief says the CBK has made forex blunders
• Safaricom is introducing advanced cloud services for businesses
• South African fintech, Revio raises $5.2 million to reduce failed payments for businesses

Written by –

Edited by –

Timi Odueso

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