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DNA ID

Community marketplace for genomics research

$45,039

Raised from 259 investors

Min: $25,000

Max: $107,000

Security Offered

Convertible Note

Minimum Investment: $100

DNA ID is hosting an investor webinar on
November 14th at 11:00am CST. Sign up here.

  • Launched in October 2018 and began generating revenue in June 2019

  • Accepted into the Antler Accelerator Program in August 2019

  • Completed two successful pilot tests in early 2019

  • Partnered with Cure Rare Diseases to set up a patient registry

Executive Snapshot

DNA ID was founded in October 2018 and began generating revenue in June 2019. So far in 2019, the company has conducted a pilot program for data analysis and has partnered with Cure Rare Diseases, an organization that forges collaborations with researchers and clinicians to develop customized therapeutics for rare diseases, to set up a patient registry. In August 2019, DNA ID also partnered with Your DNA to connect rare disease patients to genetic researchers in a safe, secure, and more efficient way. The company released its app in the Apple App Store and acquired over 50 new users in August 2019, reaching 320 total users. The company plans to use the proceeds of this raise to hire additional engineers, sales, and business development staff.

Terms

Security Type: Crowd Note

Round Size: Min: $25,000 Max: $107,000

Valuation Cap: $3 million or $4 million

Conversion Provisions: In connection with an equity financing of at least $1 million, the Company has the option to convert the Crowd Note into shares of non-voting preferred stock (Conversion Shares) at a price based on the lower of (A) the price paid per share for Preferred Stock by investors in the Qualified Equity Financing or (B) the price paid per share paid on a $3 million or $4 million valuation cap. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Transaction Type: Primary

Perks

Investors that purchase the first 53,500 Crowd Notes, and thereby fund the first $53,500, will receive Crowd Notes with a conversion provision based on a $3 million valuation cap instead of a $4 million valuation cap. That means, in connection with equity financing of at least $1 million, the company has the option to convert the Crowd Note into non-voting preferred shares (Conversion Shares) at a price based on the lower of (A) the price per unit paid for Preferred Shares by investors in the Qualified Equity Financing or (B) the price per share based on a $3 million valuation cap (instead of $4 million).

Overview

Opportunity

At-home genetic testing has grown in popularity over the past several years. Originally used as a way for individuals and families to learn about their ancestral origins, today’s direct-to-consumer (DTC) testing kits are designed to analyze an individual’s potential risk of developing or passing on hereditary diseases, potentially adverse genetic conditions, physical health issues, and more. These advancements have helped promote awareness of genetic diseases while giving consumers the opportunity to proactively manage their physical wellbeing.

With DNA ID, people can now monetize their DNA findings from these at-home genetic testing kits while also helping scientists with rare disease research and cures. Rare disease researchers struggle to find patients without the help of a clinician and even with one, can have difficulties filling clinical trials. Due to the small market of rare diseases, funding is scarce for researchers, and there is typically a lack of existing literature and research.i  

DNA ID connects DNA contributors directly to medical researchers using a blockchain-based marketplace for easy collaboration and incentivization. By creating a fair, transparent marketplace to incentivize and reward people for sharing their DNA and health data, DNA ID facilitates direct access to disease-curing studies and research.

Press

Product

DNA ID seeks to help rare disease advocacy groups organize their patient community and healthcare data. The company plans to accomplish this by creating a trusted, open-access data platform utilizing encrypted storage and sharing solutions using blockchain technology. Through the DNA ID patient registry platform, the company is able to provide research with patient-reported outcomes, passive data collection, and genomic and digital health data, helping researchers put together a more complete picture of real-world evidence. The DNA ID platform can be accessed online or through its mobile app, currently available on iOS and scheduled to be released for Android devices in Q4 2019.

For DNA Contributors:

DNA contributors are able to monetize their raw genetic data from 23andMe, Ancestry.com, or MyHeritage by simply uploading their results. Contributors can also connect their Apple Health Kit in order to manage their health data in one place and get rewarded for daily step activity and completed surveys. Once contributors upload their sequenced DNA data, they can:

  • Browse research projects – contributors can browse research projects and help rare disease researchers accelerate their studies from heart health, autism, sickle cell, diabetes, and many more.
  • Manage what data to share – contributors have full control over what health data they share. Each project has specific permissions and users can choose to share their gender, ethnicity, height, weight, and other phenotypes in an anonymous, non-identified way.
  • Get Paid – contributors get paid for helping specific research projects. The more contributors share, the more their data is worth. Once a user shares their data, they can view past transactions and an overview of what data was shared with the researchers on the platform. Payments are made to patients in the form of Ethereum (ETH) through digital wallets directly from researchers.

For Researchers

Researchers can utilize the DNA ID platform to connect with participants, collect applicable sequenced DNA, and utilize already analyzed data and insights on the platform. Researchers can choose between a Basic, Standard, or Advanced subscription. Subscriptions include:

  • Basic: includes user authentication, web survey collection, unlimited questions, and unlimited responses.
  • Standard: includes all basic functionality and genomic connection, data collection via web, iOS, or Android, and automated data analysis.
  • Advanced: includes all standard functionality and health records connection, data export and sharing, and marketplace access.

DNA ID solutions help clients organize their patients in a more research-friendly way, enabled by technology. DNA ID combines its capabilities in business strategy, technology strategy, and operations/functional strategy to help advocacy groups and researchers shape and execute their research objectives. The patient registry solution includes:

Data Collection

Enabling data collection to revolve around putting the patient first. The company uses passive data collection enabling longitudinal studies over time.


Data Analysis

Enabling custom analytic reports based on data collection. Easy to work with APIs and programming interfaces to enable quicker analysis of good, clean data.


Data Sharing

The company enables patients to be a part of global research network. Creating a double-opt-in marketplace for patients to unlock their records.


Use of Proceeds & Product Roadmap

DNA ID plans to use the majority of proceeds from this raise on future wages, general marketing, and general working capital. If the minimum amount of $25,000 is raised, the company plans to spend $15,000 on future wages in order to hire a software engineer and a marketing/business development employee. The company will allocate $4,500 to general working capital, $3,000 for general marketing, and $2,500 to cover marketing and other fees for this raise.

If the maximum amount of $107,000 is raised, DNA ID plans to allocate $74,500 to future wages in order to hire three software engineers and two marketing/business development employees. The company plans to use the remaining proceeds from this raise on the following:

  • Research and development: $10,000
  • Expenses related to this campaign: $2,500
  • General marketing: $10,000
  • General working capital: $10,000

Product Roadmap

The company has three main goals in the product development process:

  • Increase distribution of the platform by supporting Android devices.
  • Extend existing data storage infrastructure to be extensible through API development.
  • Increase the data inputs collected from the users including electronic health records.

The company intends to achieve these goals by spending on marketing, hiring additional staff to build out the platform, and developing new partnerships.

Business Model

Initially, the company released its product as software-as-a-service for patient advocate groups. The product is free to use for contributors, and researchers can choose between three subscriptions: Basic for $29 per month, Standard for $129 per month, or Advanced for $249 per month.

Additionally, the company plans to release a clinical trial recruitment platform in the future. The company will charge a transaction fee for organizations to connect with patients.

User Traction

So far in 2019, the company has conducted a pilot program for data analysis and also partnered with Cure Rare Diseases to set up a patient registry and Your DNA to connect rare disease patients to genetic researchers in a safe, secure, and more efficient way.

The company released its app in the Apple store in August 2019 and acquired over 50 new users to reach a total of 320 total users. The company plans to allocate a portion of the proceeds from this raise towards general marketing to expand awareness of the platform. The company also plans to hire sales and business development employees to gain more partnerships.

Historical Financials

DNA ID began generating revenue in June 2019. The company has had two paid customers totaling just under $1,000 in revenue.

DNA ID was incorporated in September 2018. In 2018, the company incurred roughly $1,500 in expenses. Since inception as of August 2019, the company has incurred ~$10,800 in total expenses. In 2019 through August, the company accrued total expenses of roughly $36,000. The largest expense was for third-party contractors totaling $16,800. Other significant expenses in 2019 have gone towards rent ($2,072), meals and entertainment ($2,100), and advertising ($1,824).

DNA ID has generated a year-to-date net loss of $8,247 as of August. In the last four months of 2018, the company generated a net loss of roughly $1,700. The company currently has over $26,000 in cash on hand with an estimated runway of more than one year.

Past Financing

Since inception, the company has raised $40,000 from friends and family in the form of SAFE Notes. In August 2019, the company was accepted into the Antler Accelerator Program. The program provides DNA ID with mentorship, investors, advisors and potentially a $150,000 investment in the form of a convertible note.

Industry

Due to the small market of each rare disease, funding is scarce for researchers, and there is typically a lack of existing literature and research.ii Although there is a small market for each rare disease individually, combined, rare diseases affect around 400 million people globally, more than the U.S. population. There are also currently roughly 7,000 distinct types of rare and genetic diseases, and 50% of these rare diseases don’t have a foundation or research support group. On average, it takes eight years for rare disease patients to receive an accurate diagnosis, and 95% of rare diseases don’t even have an FDA approved treatment.iii Studies have found that DNA sequencing can help detect rare diseases quickly and contribute to research to find cures. By accelerating the diagnosis, treatment options may become available sooner and at an earlier stage.iv

The global genetic testing market was valued at an estimated $7.5 billion in 2017 and is expected to grow at a compound annual growth rate (CAGR) of 11.3% through 2025 to reach $17.6 billion.v There are thousands of genetics tests available that can be used in the following ways:vi

  • Diagnostics: Identifies whether an individual has a certain genetic disease (e.g. cystic fibrosis and Huntington’s disease)
  • Predictive genetic testing: Determines whether an individual may have an increased risk for a specific disease
  • Screening genetic tests: Tests performed on a large segment of the asymptomatic population to determine whether they need more definitive testing to diagnose a genetic disease (e.g. newborn screening and noninvasive prenatal screening)
  • Pharmacogenomics: Identifies variations in an individual's genetic makeup to determine whether a drug is suitable for that patient
  • Whole-genome and whole-exome sequencing: Most often used in complex diagnostic cases, but is being explored for use in asymptomatic individuals to predict future disease
  • Tumor analysis: Examines genetic markers in a tumor to determine which genetic alterations are driving tumor growth and which therapies would be most effective

While most genetic tests are only available through a healthcare provider, the direct-to-consumer (DTC) genetic testing market still covers a wide range of tests, including genetic diseases, traits (e.g. male hair loss), wellness, carrier status, and paternity testing.vii Prices of DTC genetic tests range from less than $100 to a few thousand dollars.viii Consumers are encouraged to speak with a doctor or healthcare practitioner about these tests before making health-related decisions.ix According to biotechnology research firm Kalorama Information, the global DTC genetic health testing market was valued at $99 million in 2017 and is estimated to grow at an average rate of 25.6% to reach $310 million in 2022.x

Competitors

RDMD: Founded in 2017, RDMD is a medical data science company with a mission of empowering patients and communities to accelerate the development of treatments for rare diseases of all kinds. The company helps to identify patients and generate regulatory-grade evidence to enable drug approvals and real-world evidence in rare diseases. Through its technology platform, patients and families can benefit from their own data while researchers gain deep insights to accelerate rare disease research and drug development. In August 2018, RDMD raised $3 million led by Lux Capital with participation from Village Global, First Round's Healthcare Co-Op, Garuda, Shasta Ventures, and various angel investors.xi

Backpack Health: Founded in 2016, Backpack Health’s goal is to make it easy for everyone to access, own, and control their health information to support better health care and attain better health for themselves, their loved ones, and their communities. The company provides a platform for organizations to engage patients, collect up-to-date data, and build communities around the globe. The Backpack Health platform provides users with an Emergency Share Card to detail their most crucial health information and allows users to create a unique, secure web address to provide loved ones and health professionals in case of an emergency. In March 2019, the company partnered with StickyJ to improve its medical ID accessories by engraving a simple URL on it.xii  

LunaDNA: A subsidiary of LunaPBC, LunaDNA is a community-owned, health and DNA platform dedicated to advancing research through community engagement. In December 2018, LunaDNA received precedent-setting qualification from the SEC to recognize an individual’s genomic and health data as currency with which to acquire ownership of a company. This allows members of LunaDNA to securely provide their health data, help advance research, and receive shares in the company as compensation. In May 2018, LunaPBC raised $4.6 million in funding from ARCH Venture Partners, Bain Capital Ventures, F-Prime Capital, Illuma Ventures, and Osage University Partners. The company has raised a total of $7.6 million.xiii

Nebula Genomics: Founded in 2016, Nebula Genomics leverages blockchain technology to empower people to monetize their own personal genomic data. Consumers can purchase a Whole Genome Sequencing kit and the company will send the customer a saliva collection kit. Once the customer sends it back, the company will extract, sequence, and analyze the DNA in order to provide details on ancestry, inherited traits, and microbiome composition. Customers can also purchase a subscription to Nebula Explore, a stream of curated content that gives customers insight into the latest genomic research and also allows customers to participate in scientific discovery and potentially earn money from participation. The Nebula Sequencing kit costs $149.99 while the Nebula Explore costs $6.99 per month.xiv In August 2018, the company raised $4.3 million in funding from Khosla Ventures, Arch Venture Partners, Fenbushi Capital, F-Prime Capital Partners, and more.xv

Invitae (NYSE: NVTA): Invitae Corporation provides genetic information services including processing DNA-containing samples, analyzing information related to patient-specific genetic variation, and generating test reports for clinicians and patients. The company provides a number of tests including genes associated with neurological disorders, cardiovascular disorders, pediatric disorders, metabolic disorders, and more. Invitae is also the parent company of AltaVoice, a platform that collects, curates, and delivers data from patients to clinicians, and CancerGene Connect, a platform that collects and manages genetic family histories to deliver personalized genetic risk information. In 2018, the company generated revenue of $147.7 million, up from $68.2 million in 2017.xvi

Team

Craig Calderone

Founder & CEO

Prior to founding DNA ID, Craig held senior sales engineering roles at Leanplum, a fully integrated optimization solution for mobile apps, and at Chartbeat, a company that gives publishers the insights to better engage audiences. Previously, Craig was a Program Manager at Techstars where he advised various startups and helped them prepare for their future financing rounds. Craig graduated with a B.A. in Economics from Villanova University.

Discussion

Risks

The information provided herein is not intended to be, nor should it be construed or used as, investment, tax or legal advice, a recommendation to purchase, or an offer to sell securities of the company. You should rely on the offering statement and documents attached as exhibits to the offering statement when making any investment decision. An investment in the company is not suitable for all investors. 

Investment Risk

An investment in the company is speculative, and as such is not suitable for anyone without a high tolerance for risk and a low need for liquidity. You should invest only if you are able to bear the risk of losing your entire investment. There can be no assurance that that investors will receive any return of capital or profit. Investors should have the financial ability and willingness to accept the risks (including, among other things, the risk of loss of their entire investment and the risks of lack of liquidity) that are characteristic of private placement investments. There will be no public market for the securities being offered, applicable securities laws will restrict any transfer of the securities, and the securities will not be transferable without the company’s consent.

Company Risk

The company’s industry is highly competitive, and the company may not be able to compete effectively against the other businesses in its industry. The company is subject to a number of significant risks that could result in a reduction in its value and the value of the company securities, potentially including, but not limited to:

  • Rapidly changing consumer preferences and market trends,
  • Inability to expand and maintain market acceptance for the company’s services and products,
  • Inability to gain access to international markets and comply with all applicable local laws and regulations,
  • Inability to achieve management’s projections for growth, to maintain or increase historical rates of growth, to achieve growth based on past or current trends, or to effectively manage rapid growth,
  • Inability to develop, maintain and expand successful marketing relationships, affiliations, joint ventures and partnerships that may be needed to continue and accelerate the company’s growth and market penetration,
  • Inability to keep pace with rapid industry, technological and market changes that could affect the company’s services, products and business,
  • Technological problems, including potentially widespread outages and disruptions in Internet and mobile commerce,
  • Potential costs and business disruption that may result if the company’s customers complain or assert claims regarding the company’s technology,
  • Failure to adequately address data security and privacy concerns in compliance with U.S. and international laws, rules and policies,
  • Performance issues arising from infrastructure changes, human or software errors, website or third-party hosting disruptions, network disruptions or capacity constraints due to a number of potential causes including technical failures, cyber-attacks, security vulnerabilities, natural disasters or fraud,
  • Inability to adequately secure and protect intellectual property rights,
  • Potential claims and litigation against the company for infringement of intellectual property rights and other alleged violations of law,
  • Difficulties in complying with applicable laws and regulations, and potential costs and business disruption if the company becomes subject to claims and litigation for legal non-compliance,
  • Changes in laws and regulations materially affecting the company’s business,
  • Liability risks and labor costs and requirements that may jeopardize the company’s business,
  • Dependence on and inability to hire or retain key members of management and a qualified workforce,
  • Ongoing need for substantial additional capital to support operations, to finance expansion and/or to maintain competitive position,
  • Issuance of additional company equity securities at prices dilutive to existing equity holders,
  • Potential significant and unexpected declines in the value of company equity securities, including prior to, during, and after an initial public offering, and
  • Inability of the company to complete an initial public offering of its securities, merger, buyout or other liquidity event.

Endnotes