Sophia Genetics raises $77m after Mike Lynch quits board

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Swiss genomics start-up Sophia Genetics has raised $77m from investors including Generation Investment Management, a fund chaired by former US vice-president Al Gore, after embattled British entrepreneur Mike Lynch agreed to step down from its board.

Mr Lynch was charged in November with 14 counts of conspiracy and fraud in the US for allegedly overstating the financial performance of Autonomy, the business he founded and sold to HP in 2011 for $11bn.

The charges have raised questions for companies that Mr Lynch has backed through his London-based investment vehicle Invoke Capital, including Sophia Genetics and cyber security start-up Darktrace.

Lilly Wollman, co-head of growth equity strategy at Generation Investment Management, said Mr Lynch agreed to step down from the board of Sophia Genetics before he was indicted.

He had come under growing pressure since his former Autonomy colleague, Sushovan Hussain, was convicted in the US of 16 counts of fraud last April.

“As part of our investment and before the indictment, we agreed with Sophia that Mr Lynch would step down from the board,” she said. “There was obviously noise around Invoke and the Autonomy investigation long ago, and we just thought it could prove a distraction for the company and that it would be in their best interest if he stepped down.”

Invoke Capital is not under investigation, and still has a seat on the board of Sophia Genetics.

“Mike has decided to step away from some of his public-facing roles whilst he focuses on clearing his name,” Invoke Capital said. “This was his decision alone and, whilst it’s a shame, it’s the right thing to do.”

The $77m investment is understood to value Sophia Genetics at about $450m.

Jurgi Camblong, the start-up’s chief executive and founder, said the company would use the money to expand further into the US and add new sources of data to its platform ahead of a planned initial public offering in 2021.

“We believe that there will be a tech giant in our industry, but that will require a lot of capital,” he said. “Going public is the most financially viable way to grow, for transparency reasons and trust.”

Sophia Genetics uses supervised machine learning technology to analyse genetic data, providing doctors with suggested diagnoses. It has benefited from scientific advances in genomics, which have driven down the cost of sequencing human genomes and fuelled a wave of funding into the sector.

Between 2016 and 2017, global investment into genomics start-ups more than doubled to $3.6bn, according to research firm CB Insights. The figure fell to $3bn last year, but the number of investments remained broadly consistent, with 157 investment deals last year compared with 159 the year before.

Mr Camblong said Mr Lynch and Invoke Capital provided useful advice on striking deals with hospitals.

“They are very good at sales,” he said. “It is a sales kind of mindset so they [were] very good at turning us from a more scientific player to a proper tech player.”

The company has deals with 850 hospitals and recently expanded into “radiomics” — the analysis of medical images from MRIs, PET-scans and X-rays to predict the evolution of tumours.

James Wise, partner at London-based venture capital firm Balderton Capital, an early investor which participated in the latest funding round, said that in the long term the start-up could begin to analyse wider pools of data for clinical insights.

“Sophia is expanding into new product lines and moving beyond just looking at genetics, radiomics is a good example of that, so is looking at the impact of drugs . . . symptoms.” he said. “In the long run you need to take a whole range of data.”

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