23andMe-China Competitor 23Mofang Secures RMB 20 Million Series A Funding to Build Consumer Genomics Market

2017Year1Month3Day, Consumer-Grade Genetic Testing2323mofang Announces Funding Round Led by Yahui Medical, with Hanwang Qichuang as Co-Investor200010,000 yuanAround of financing.The funds will be used to further strengthen and upgrade the laboratory, as well as expand markets and channels, among other initiatives.

Previously, 23mofang secured angel-round funding from Fuhou Capital in April 2015; in January 2016, it obtained Pre-A round financing from Qidian Capital and Fuhou Capital. Within less than two years, 23mofang had cumulatively raised nearly RMB 40 million.

Zhou Kun, CEO of 23mofang, revealed that the company was registered and established in March 2015, with the vision of “digitizing life to benefit everyone.” In less than two years, 23mofang has made pioneering progress in the nascent field of consumer-grade genetic testing. The company is also confident that, in the near future, it will enable everyone to promptly experience the benefits of genetic testing, leading to healthier and more scientific lifestyles. Zhou Kun further stated, “Do not perceive genetic testing as something distant; in fact, you can complete the test at home without going out, as we only require 2 ml of your saliva—nothing more.”

In China, 23mofang was the first to reduce the price of genetic testing to under RMB 1,000, offering more than 340 test items across various categories, including health, ancestry, sports performance, and physical constitution. By selling directly to consumers (C-end users) through online channels, its user base currently covers all provinces, municipalities, and autonomous regions in China, excluding Macau. Initially, 23mofang employed PCR combined with next-generation sequencing (NGS) for its testing technology. Recently, it has begun transitioning to genotyping arrays covering 900,000 loci and has entered into a strategic partnership with Affymetrix, a global leader in gene chip technology. This product offers the highest number of tested loci in the national direct-to-consumer (DTC) sector at a price point of RMB 999.

It is reported that in September 2016, 23mofang successfully obtained the approval for establishing a clinical laboratory and initiated the second phase of construction for its proprietary laboratory. This round of financing will be invested in laboratory construction, product research and development, and other areas. Remaining true to its original mission, the company has been leveraging genetic testing to help users identify unknown health risks, rare genetic disorders, drug responses, and constitutional traits. This empowers users to transition from ignorance to understanding of their own bodies, while providing scientific guidance on how to mitigate disease risks and maximize their personal advantages.

As is well known, the technological cost of genetic testing has been declining rapidly in recent years, prompting numerous companies and investors to flock to this sector in recognition of its immense potential. Zhou Kun believes that although there are many companies engaged in consumer-grade genetic testing, the quality of these firms varies significantly. Moreover, the industry is still in a very early stage with considerable uncertainties. For consumer-grade genetic testing companies to achieve significant breakthroughs, they must address two core challenges: how to acquire users and how to continuously collect users’ phenotypic data.

Over the past year or so, 23mofang has developed effective strategies to address these two challenges and has gained recognition from investors in this round of financing. 23mofang aims to rapidly build a gene and phenotype database through a direct-to-consumer (DTC) model. Once this database covers millions or even tens of millions of individuals, its intrinsic value will be substantial.

Zhou Kun also revealed that 23mofang will further explore the applications of genetic testing results this year. While genetic testing is a tool that helps people gain a deeper understanding of themselves, many are often unsure how to utilize the results after receiving them. Zhou Kun believes that completing genetic testing and data interpretation is not enough; it is essential to help users apply their test results in practical ways to improve their quality of life.

Currently, 23mofang is exploring partnerships with channels that can integrate with its future products. However, when it came to the specifics of these collaborations, Zhou Kun remained coy: “They will differ significantly from traditional partnership models. Our primary focus is on addressing the issues users face after testing.”

In recent years, capital investment in genetic testing has continued to grow, both in clinical genetic testing and the broader health and wellness sector. Zhou Kun believes that the genetic testing market will expand significantly in the coming years. The company plans to complete genetic testing for over one million individuals by around 2019, build a genetic database, provide users with more health-related services in the future, and develop a consumer-grade genetic testing market.