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Court Blocks Sale of 54gene Assets—Founder Pushes Back Against Investors

  • Writer: Derry Thornalley
    Derry Thornalley
  • Aug 2
  • 3 min read

Updated: Aug 4

Two days ago, a Lagos Federal High Court issued an injunction stopping the planned sale of 54gene’s assets, effectively saving the company from dissolution. It’s a rare judicial lifeline for a startup once hailed as Africa’s genomics crown jewel—now mired in a fierce governance and investor conflict.


The Turning Point

Back in July 2025, Dr. Abasi Ene‑Obong, founder and former CEO of 54gene, petitioned the court alleging that the company’s majority investors—Cathay AfricInvest Innovation Fund and Adjuvant Capital—had systematically orchestrated the company’s downfall. His petition detailed a long list of alleged abuses: sidelining the board, rejecting his $110 million rescue package, and deliberately driving the Nigerian entity into bankruptcy.


Most alarmingly, he claimed the investors had planned—without his knowledge—to sell off the biodata of 100,000 Nigerians, valued at $3 million, effectively putting Africa’s first large-scale genomic biobank at risk.


In granting the injunction, the court acknowledged the seriousness of the allegations and preserved 54gene’s assets while litigation unfolds.


A Founder at War with His Backers

This is not a simple startup dispute. Ene‑Obong alleges investors:

  • Dismissed his board authority.

  • Blocked revenue-generating deals.

  • Pressured him to resign.

  • Forced the company valuation from $170 million down to $50 million.

  • Imposed a loan with a fourfold liquidation preference giving investors priority in any sale.

Even after he offered to buy back the company for $3 million, investors demanded a $100,000 "legal fee" within 24 hours—with no contingency. When he declined, they pushed ahead with asset liquidation plans.


Why It Matters

54gene launched in 2019 with global ambitions: to create a pan-African genomic repository and drive drug discovery using African data. It raised over $45 million, built a biobank covering 100,000 Nigerians across 300 ethnic groups, and developed dozens of proprietary genomics tools .


But by 2023, as COVID testing revenues plummeted and investment momentum collapsed, the company slid into crisis—losing staff, pivoting to diagnostics, and ultimately shutting down amid leadership turmoil.


What Happens Next?

This court victory is just the opening act. The legal battle will examine:

  • Whether the investors had the right to sell biodata without proper governance checks.

  • If the board—including independent directors—was overridden improperly.

  • Whether data representing Nigerian citizens can be considered a saleable asset.


Dr. Ene‑Obong emphasized that 54gene’s mission was built on ethics and trust—and that safeguarding the biobank is about protecting communal heritage, not just corporate IP.


Adjuvant Capital declined to comment on specifics, saying it acts in its partner companies’ best interests and stands for global public health impact. Cathay didn’t respond to media enquiries .


A Broader Signal: Control, Data, And Ethical Boundaries

What’s unfolding at 54gene transcends one company. It’s a test case at the intersection of founder-investor dynamics, data ownership, and rightful control of African innovation.


As African startups increasingly handle sensitive data—from genomes to health records—the governance and ethics frameworks underpinning them have never been more critical.


Final Thought

For investors, regulators, founders, and global partners watching Africa’s tech ecosystem evolve, this case raises hard questions:

  • Who truly controls startups when capital calls the shots?

  • What happens to data belonging to individuals and communities if governance breaks down?

  • Can founder-originated missions like 54gene’s survive heavy-handed investor intervention?


This is not just a legal battle. It’s a litmus test for how Africa balances capital, control, and trust in its high-stakes startup economy.

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