We decipher genomes. Bargain

Genotek is an example of a successful startup that offers DNA tests and genetic research to private and corporate customers. Board members and company founders Artem Ermulatov and Valery Ilyinsky speak about how Genotek, despite the specifics of its services, managed to become the industry leader and solve unconventional tasks.

Future Genotek founders Valery IlyinskyArtem Ermulatov and Kirill Petrenko graduated from the Moscow State University. Valery studied biology, Artem and Kirill mechanics and mathematics. They met during their senior years when they developed a genetic data interpreter and created a microchip with a matrix of biomaterials. Initially, it was a theoretical project for implementation of which they won a grant-aid.

During the first years, the scientists’ collaboration mostly consisted of experiments and research. The decision to found a startup, Genotek, came much later, in 2010. The Moscow City Government supported the project as did research institutes with which the company signed equipment outsourcing agreements.

The team managed to attract its first funding from private investors and the RustarsVentures venture fund, in late 2013. Some of this money was invested in marketing.

Genotek staff performed genome sequencing (‘extracting’ the code from the DNA that shows the sequence of basic nucleotides, guanine, adenine, thymine and cytosine), after which they compared the extracted code with the biomaterial matrix data, determined risks of diseases and disposition towards various activities.

In the West, this test is expensive. Genotek’s innovation is making the product cheaper. This was possible thanks to a new technology that simplifies and accelerates genome sequencing.

However, population’s lack of education was a hindrance. No one knew about genetic tests and what to make of them. During the initial stage, Genotek was advertising its services rather than the company itself. Article were published in scientific and popular science magazines, as well as Cosmopolitan and other beauty magazines.

Genotek was aiming at ordinary people – those who knew little about genetics and biology. The company helped people handle the tests interpretations and told them about detected genetic predispositions. Its primary audience were people of the middle class and middle age, who were already concerned about their health.

In 2010-2014, Ilyinsky thought popular genetics would bring the core profit. Yet, following 2014 and beyond, the company was getting half of its net profit from implementing corporate orders, with research institutes and pharmaceutical companies making requests for deciphering the genetic code of viruses and bacteria. This is scientific work that is expensive and time-consuming. This market had been in existence before Genotek started its activity; the company entered this market, carved its own niche, and offered a new technology that was less expensive and more advanced.

Today, the company employs 65 specialists, including five doctors of science and nine candidates of sciences. Genotek offers its services in 16 countries, with its affiliated company in Kazakhstan. The company is headquartered in Moscow, with its laboratory and the medical and genetic center. Genotek’s laboratory was Russia’s first to receive an international global standards compliance certificate. Throughout the years of the company’s existence, its partners have included Sechenov Moscow Medical University, Research Institute for Medical Genetics of the Russian Academy of Medical Sciences, Australian company Novogenia, and a number of other Russian and foreign companies.

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