Color Genomics is a private genomics company that provides genetic testing services. They offer at-home screening tests for hereditary cancers, as well as pharmacogenomics and cardiovascular tests. Color Genomics is not currently a publicly traded company.
Genetic testing has become increasingly popular in recent years, with many companies offering direct-to-consumer tests that provide insights into health risks and ancestry. Color Genomics is one of the leading providers of genetic screening tests, focusing specifically on testing for hereditary cancer risks.
The company was founded in 2013 by technology entrepreneurs Elad Gil and Othman Laraki. Color Genomics has raised over $150 million in venture capital funding to date from investors including General Catalyst, CRV, and Emerson Collective. However, despite its growth and success, Color Genomics remains a privately held company.
Many innovative health technology startups aim to eventually hold an initial public offering (IPO) and become publicly traded on a stock exchange. This allows early investors to cash out returns and provides the company access to more capital to fund expansion. So a natural question is – will Color Genomics have an IPO and go public anytime soon?
Color Genomics Business Model
To better understand the potential for a Color Genomics IPO, it helps to look at their current business model and sources of revenue:
- At-home genetic test kits – Color offers a hereditary cancer risk test, BRCA test, pharmacogenomics test, and cardiovascular health test directly to consumers online. The tests range from $99-$249.
- Physician-ordered tests – Color provides genetic tests that doctors can order for patients. These are often covered fully or partially by health insurance.
- Partnerships – Color Genomics partners with hospitals and other organizations to provide genetic testing services and counseling.
- Data insights – Color uses de-identified aggregate data from its testing services to provide insights to pharmaceutical companies for drug development and clinical trials.
This multi-pronged approach has helped Color Genomics grow rapidly since its launch. The company now boasts a team of over 400 employees and has delivered over 1.5 million genetic tests to date.
Color Genomics Funding History
As a private company, Color Genomics has relied heavily on venture capital funding to finance its growth so far. Here is an overview of the major funding rounds completed by Color Genomics:
| Date | Funding Type | Amount Raised | Lead Investors |
|---|---|---|---|
| October 2013 | Seed round | $3 million | Brian Singerman, Bill Maris, Mitch Kapor |
| August 2014 | Series A | $15 million | General Catalyst |
| June 2015 | Series B | $40 million | General Catalyst, CRV |
| March 2018 | Series C | $80 million | General Catalyst, CRV, Emerson Collective |
| January 2020 | Series D | $75 million | General Catalyst, CRV, Viking Global |
In total, Color Genomics has raised over $210 million in private capital. This includes investments from high-profile firms and individuals like Bill Maris, the founder of Google Ventures.
Acquisitions by Color Genomics
In addition to venture funding, Color Genomics has expanded through strategic acquisitions. Key acquisitions include:
- Dioptic – In 2017, Color acquired the team behind the prescription eyeglass company Dioptic and used the team’s imaging expertise to develop its in-house assets and technology.
- Gene pool – In 2018, Color acquired another genetic testing startup called Gene pool that focused on cardiology diagnostics. This allowed Color to move into cardiovascular testing.
- Oasis Diagnostics – In 2021, Color acquired this Vancouver-based laboratory specializing in hereditary cancer testing. The buy strengthened Color’s footprint in Canada.
These deals have brought specialized talent, technology, and infrastructure under the Color Genomics umbrella. Acquisitions are often a key part of growth for ambitious startups like Color.
Color Genomics IPO Potential
Given the company’s strong funding history and growth, many industry observers have speculated if or when Color Genomics could move towards an initial public offering (IPO). There are several factors that support potential for a future Color Genomics IPO:
- Large addressable market – Genetic testing is a multi-billion dollar market globally and growing at around 15% annually. As a leader, Color has room to capture more market share in the future.
- Recurring revenue streams – Color’s at-home subscription products like pharmacogenomics testing provide predictable recurring revenue.
- Reputable investors – Having top-tier VC firms like General Catalyst and CRV who regularly back IPO-bound companies is a positive signal.
- Experienced leadership – Co-founder Elad Gil previously helped guide genomics firm 23andMe towards an IPO.
However, there are also reasons why Color Genomics may choose to remain private for the foreseeable future:
- No imminent need for capital – With $200+ million raised already, Color is well-funded for now.
- Regulatory challenges – Healthcare companies often face extra scrutiny and compliance burdens post-IPO.
- Competitive threats – Going public means more transparency which could aid competitors.
- Profitability concerns – Color spends heavily on growth and may not yet be profitable, which could limit IPO appeal.
Ultimately the decision whether and when to IPO comes down to Color Genomics management’s overall strategic priorities. They may choose to stay private if they feel it allows more long-term flexibility. However, if the company keeps up its impressive growth, the case for a public listing could get stronger over the next few years.
Comparable Publicly Traded Companies
Although Color Genomics itself is not currently publicly traded, looking at comparable public genomics companies can provide some valuation context.
Below are a few key publicly traded genetic testing firms that could be seen as reasonable comparables:
| Company | Ticker Symbol | Market Cap |
|---|---|---|
| Invitae | NVTA | $1.3 billion |
| Natera | NTRA | $5.2 billion |
| Neogenomics | NEO | $2.7 billion |
| Myriad Genetics | MYGN | $2.2 billion |
| Veracyte | VCYT | $1.5 billion |
These public comps have market capitalizations ranging from $1-5 billion. With its leading market position and strong growth, Color Genomics would likely aim for a valuation at the higher end of this spectrum if it were to IPO.
Potential IPO Valuation
Based on the comps outlined above, here is an estimate of the potential IPO valuation range for Color Genomics:
- Low-end valuation: $1.5 billion
- Mid-range valuation: $3 billion
- High-end valuation: $5 billion
At a $3-5 billion IPO valuation, Color Genomics would rank among the larger healthcare tech offerings of recent years. For example, Livongo Health went public in 2019 at a $3.4 billion valuation while Royalty Pharma was valued at $6.7 billion at IPO in 2020.
However, Color Genomics’ growth trajectory and strong competitive position support a lofty valuation if it were to go the IPO route. The company’s recurring subscription revenues would also be well-received by public market investors.
Investor Considerations if Color Genomics IPOs
For investors, a potential Color Genomics IPO would bring an opportunity to gain exposure to the high-growth genetic testing sector. Here are some key factors investors would want to evaluate:
- Competitive differentiation – Does Color Genomics have a sustainable competitive edge versus rivals?
- Regulatory compliance – Does the company have rigorous protocols in place to meet complex regulations?
- Data security – Are customer DNA records and health data appropriately protected?
- Management expertise – Does the executive team have the required experience in the healthcare and genomics spaces?
- Insurance coverage – Will insurance reimbursement rates for genetic tests remain favorable in the future?
Investors in the IPO would also want assurance that Color Genomics is being priced reasonably relative to public peers. But the company’s mission-driven focus on expanding access to genetic tests could make it appealing to many growth investors if it hits the public markets.
Conclusion
In summary, Color Genomics has not yet announced any specific plans to hold an IPO. The company is still privately held and has ample venture capital funding to fuel expansion for now.
However, Color Genomics is one of the most promising companies in the genetic analysis space. With its rapid growth and recurring subscription revenues, Color has many of the characteristics of a business ready to transition to the public markets.
The genomics category is expected to enjoy massive growth over the next decade. If Color Genomics can maintain its leadership position, the company could eventually pursue an IPO to tap into public investor demand. This would likely value Color Genomics at $3 billion or more.
For now, those hoping to invest in Color Genomics will have to wait and see if the company pursues a public listing. But it remains a compelling privately held firm at the forefront of making genetic insights more accessible to individuals and healthcare providers.