Nigerian court blocks sale of 54gene’s assets, as founder claims investor wrongdoing

A Federal High Court in Lagos has granted an injunction blocking the sale of 54gene’s assets, preventing the dissolution of what was once one of Africa’s most promising startups, according to court documents seen by TechCabal. Assets slated for sale included the biodata of 100,000 Nigerians priced at $3 million.

In a petition filed in July 2025, Dr. Abasi Ene-Obong, 54gene’s founder, accuses the company’s largest investors, the Cathay AfricInvest Innovation Fund and Adjuvant Capital, of orchestrating its collapse. 

He alleges they sidelined the startup’s board and made decisions on behalf of 54gene, rejected a $110 million rescue package, threatened to spread rumours of a fraud investigation against him, forced the Nigerian operating company into bankruptcy, and rejected his offer to buy them out. 

“At 54gene, our mission—to harness African genomic insights for better health—rests on the highest standards of ethics and community trust,” Ene-Obong said in a statement to TechCabal. “We should hold ourselves accountable to every study participant, business partner, investor, creditor, and the broader communities we serve.”

The case marks one of the most dramatic unravelings of a high-profile African startup, raising questions about investor control and founder rights. Once valued at $170 million and backed by prominent investors, 54gene shut down in 2023 in a cloud of controversy over internal power struggles, failed fundraising, and disputed governance.

“We are unable to comment on specific matters that will be addressed via the court system,” said an Adjuvant Capital representative. “However, we only act in the best interests of our partner companies. As an impact investment firm focused on global public health, our priority is also to work with local partners to ensure the safety and viability of the biobank such that it remains available for the benefit of Nigeria and the broader African continent.” 

Cathay AfricInvest Innovation Fund did not respond to requests for comments. 

After a significant drop in revenue—due to the drop in demand for COVID-testing—the investors insisted that 54gene raise a $100 million Series C round in April 2022, refusing Ene-Obong’s advice for a bridge round. Within a month of fundraising, it became clear that the startup could not raise the funding due to the constant and sharp drop in its revenue post-COVID.

Ene-Obong claims that he secured a $200 million pre-money valuation and $80 million in investment commitments, but the company’s board blocked funding and sent an email asking him to stop fundraising for 54gene. The accused investors, who both sat alongside Ene-Obong and three independent directors on 54gene’s board, then appointed a Lagos-based lawyer as the receiver of 54gene Nigeria.

He alleges that he was forced to resign as CEO by the investors, who also forced the company’s valuation from $170 million to $50 million and demanded four times their original investment back before any proceeds from a liquidity event, guaranteeing their loan to the company. The board also refused to allow external funding until 54gene received follow-on capital from their firms, shut down revenue-generating business lines, blocked a $500,000 contract, and took over the company.

54gene had three independent directors, with Ene-Obong as the common director, and Cathay AfricInvest Innovation Fund and Adjuvant Capital as preferred directors, completing the board.

How the cracks at 54gene started to appear

When 54gene raised money from investors, they got equity in 54gene Inc., the U.S.-incorporated holding company, which owned 99% of 54gene Nigeria, its Nigerian operating subsidiary, while Ene-Obong owned the other 1%. 

Ene-Obong claims that after his resignation in October 2022, the investors transferred all the assets and intellectual property into the Nigerian subsidiary so they could sell off the assets without proper accountability or oversight. Adjuvant and Cathay AfricInvest combined own 29.4% of the startup and control the company following Ene-Obong’s exit.

Adjuvant led 54gene’s Series A round in 2020, but a few weeks after agreeing to a $60 million valuation, it told Ene-Obong that a limited partner in its firm decided that the deal should only proceed at a $50 million valuation. Ene-Obong agreed. Two weeks before signing the contract, the firm again reduced its valuation to $30 million, acquiring 22 % of 54gene instead of 15 %.

54Gene CEO, Dr. Abasi Ene-Obong.

Cathay AfricInvest led 54gene’s $25 million Series B round the following year for 4.77% of the company, while Adjuvant participated in the Series B round and got 2.66% of the company. Ene-Obong claims that Cathay AfricInvest still owes 54gene $1 million.

54gene’s problems began in 2022 after the COVID-19 vaccine became widespread and a business pivot to advanced molecular diagnostics failed. This double whammy led to a drop in revenue, forcing the company to raise money to survive. 

Ene-Obong claims that after his resignation, he secured $35 million, but it was also turned down. Instead, the board asked that 54gene be acquired for $6 million, split equally between cash and stock. 

By September 2022, with 54gene’s runway almost exhausted, the board presented a loan facility to 54gene with conditions that included a new board chair and that only Adjuvant and Cathay invest at a $50 million valuation, but with a 4× liquidation preference. Common shareholders would also lose veto rights, giving Adjuvant and Cathay the power to force a sale.

The loan would also rank as the most senior debt of 54gene and would be secured against all of 54gene’s assets, including the biobank and intellectual property. The company agreed when Ene-Obong was still CEO, as he resigned the following month. 

After Ene-Obong left the company, the investors took control of the company with a supervisory committee that operates above the board. They provided a $2.4 million loan instead of the $3 million promised and asked Ene-Obong to prepare a buyback offer for 54gene for $3 million. 

Ene-Obong’s proposal was initially accepted but later rejected after he refused to wire $100,000 in cash within 24 hours to an investor “without contingencies” who claimed it was needed for legal costs, threatening to force the company into bankruptcy otherwise. He offered to pay for the legal fees, but the reconstituted board refused and moved to sell 54gene’s assets, a decision that risks placing the sensitive genomic data of Nigerians in the hands of the highest bidder and raises serious national security concerns.

How did 54gene get here? 

Launched in 2019, 54gene set out to close a gap in global medical research by providing medical researchers with DNA data from people of African ancestry. At the time, 98% of the world’s genomic data came from non-African populations, despite Africans being the most genetically diverse population on Earth. 

Its ambition was bold, and investors quickly took notice. Just fifteen months after launching, 54Gene raised over $19 million across three rounds from early backers like Microtraction, Y Combinator, Ingressive Capital, and Future Africa. These investors were betting on the company’s ability to turn Africa’s genomic diversity data into a high-revenue business by providing the foundation for breakthroughs in research, disease prevention, and drug development. 

At the height of Nigeria’s COVID-19 response, 54gene deployed mobile testing labs that helped scale the country’s daily testing capacity from 100 to over 1,000. This pivot into diagnostics drove a sharp revenue uptick and positioned 54gene to ride the global biotech funding wave during the pandemic. Beyond COVID, the company built a biobank by sequencing the genomes of 100,000 Nigerians across 300 ethnic groups and developed over 40 proprietary software tools for genomic data analysis.

54gene raised over $45 million across three funding rounds, helped Nigeria survive COVID, successfully created a biobank that can change how African medicine works, and made over $20 million in revenue, but ultimately, internal disputes between its founder and board led to its demise. 

The case is still in court and is awaiting judgment. 

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