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Techies love tackling health. The medical industry offers a heap of intractable issues, big market potential and the always desirable scale.
Among the wave of Silicon Valley biotech newcomers is Color Genomics, a company founded by two software veterans that provides affordable genetic testing on hereditary health risk. A year ago, the startup began shipping risk tests for breast and ovarian cancer; today it’s announcing options for an additional eight different types of cancer tests for women and men.
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“Historically, the only people that got tested had very specific family histories,” president Othman Laraki told Re/code. “When you’re able to make testing like this less expensive than a mammogram, it becomes worthwhile to literally test everyone.”
Laraki has this specific family history. His grandmother passed away from breast cancer, and his mother warded it off — twice. Even so, as a software engineer, he said he didn’t think about working on medical issues. From 2004 to 2008 he was at Google, working on — among other stuff — the early Chrome browser. He then left with current co-founder, Elad Gil, to start location tools startup Mixer Labs, which was bought by Twitter, where the two served as product vice presidents.
After leaving Twitter, they turned to genetics, where tech advances (and policy changes) had turned the industry into something they could work on. (Gil has a slightly different reason for this turn: He holds a doctorate in cancer biology.)
“Now it’s becoming more of a software and data problem — something we could make a contribution to,” Laraki said.
They aren’t alone. A number of biotech companies are moving into genetic testing, a market that United Health estimates could top $21 billion by 2021. Laraki’s former company, Google, is also toying with the space — primarily through Verily, the medical company now under parent shop Alphabet. Microsoft just bought a DNA startup on Wednesday.
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Certainly tech investment is flooding into the medical world. But tech has yet to prove it can build lasting businesses here or navigate the fraught regulatory waters therein. Theranos demonstrates the struggle on both accounts.
The most high-profile case here is 23andMe, which (like Color Genomics) ships a small tube that customers spit in and mail back, but has fumbled on the policy front. Laraki said his company has a different technical approach; its testing kit, which costs $249, arrives only under a physician’s order. (He also had the aid of a Supreme Court ruling in 2013, which declared that one of the startup’s competitors, Myriad Genetics, could not patent particular genes associated with certain cancers.)
Like 23andMe, though, Color Genomics has managed to tap the Valley’s pursestrings. Its initial funding round of $15 million included personal investments from tech bigwigs. Linus Upson, a Chrome co-creator and Verily VP, is a personal investor too, said Laraki. So is Chrome’s other co-creator, Google CEO Sundar Pichai.
Clearly, they all see something in the business model. Or at least in its founders.
One thing those founders said they aren’t putting in their business model is a method to turn a buck on the genetic data they collect. Asked if they would sell data to insurers, Laraki responded definitely. “No, we have no plans around that,” he said. “It’s your genome; it’s your data.”
This article originally appeared on Recode.net.
