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Informed investment: Niche tech company 'moves up the food chain'

Big-money private equity firms have come calling for InformedDNA, which decodes genetics tests.


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  • | 6:00 a.m. January 31, 2020
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InformedDNA CEO David Nixon has overseen the firm's progression from venture capital to private equity funding. Courtesy photo.
InformedDNA CEO David Nixon has overseen the firm's progression from venture capital to private equity funding. Courtesy photo.
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Investors continue to throw support to InformedDNA, a St. Petersburg tech firm that provides genetic test analysis services to health insurers.

As previously reported, the company has attracted $24 million in funding since it was launched in 2007. A key point came in 2013 when it changed its target market from individual end users to insurance companies, which face rising demand for services related to precision medicine, which tailors treatment plans based on a person’s unique gene code.

In December, the privately held firm announced it had secured funding from three additional private equity sources: TT Capital Partners, NovaQuest Capital Management and Frist Cressey Ventures. CEO David Nixon declines to disclose the dollar amount of the funding but tells Coffee Talk, “It was a majority recap. … The new investors now own a majority of the company.”

Nixon also says the new funds allowed InformedDNA’s previous majority owners, venture capital firms MPM Capital and Zaffre Investments LLC, to have a successful exit.

“Now we’ve moved up the food chain to private equity,” he says, adding the capital will provide much-needed sales and marketing muscle to an operation that has already proven itself.

Investors, he says, are “looking for us to really ramp up the scope of the work we're doing and the pace that we're achieving it. We've grown at more than 50% each of the last three years, and I believe the organization, when fully optimized in sales and marketing, can achieve 100% growth, year-over-year, for the foreseeable future, at least the next two to three years.”

Nixon says he spent about 18 months “socializing” with potential PE partners. But before he began to make formal inquiries, TTCP, NovaQuest and Frist Cressey showed up with a term sheet. “There was a lot of interest and demand,” he says. “These folks came together and preempted the process.”

 

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