Vast Ventures

Genetic testing company Recombine raises $3.3 million from FirstMark Capital

March 4, 2014: 11:00 AM ET

Unlike consumer-facing 23andMe, Recombine operates through clinics and doctors.

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FORTUNE -- FirstMark Capital is known for investing in consumer-facing software companies like Pinterest, Riot Games, and Aereo, as well as enterprise deals. But since Matt Turck, a former investor with Bloomberg Ventures, joined the firm one year ago, he's been looking at deals that are more out-there, related to big data and the Internet of Things. Take, for example, his latest investment: Recombine, a bioinformatics company.

FirstMark has invested $3.3 million in the New York-based startup. Other investors who participated in the round include new early-stage firm Vast Ventures, Vivek Garipalli, formerly of Blackstone Group (BX), as well as Alexander Saint-Amand, President and CEO of Gerson Lehrman Group, and Zach Weinberg and Nat Turner, who co-founded health care startup Flatiron Health.

Currently, Recombine provides clinical genetic testing services which are faster and cheaper than those offered by LabCo Diagnostic Network and Quest Diagnostics (DGX), the incumbent providers. Those companies' technology, much of which was created in the 1970s, requires a separate test (and separate blood samples) to test for each individual disease, and it costs up to $1,000 for each test. Recombine tests for 213 genetic disorders at once, costing $500 before insurance.

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Recombine CEO Alexander Bisignano says the incumbent services use older technology and aren't incentivized to upgrade because they have exclusive contracts with insurance companies. "It is sort of a monopoly," he says. Recombine's services are in use at 60 different medical practices.

But disrupting the medical lab industry is not Recombine's ultimate goal. The company has its sights on something it believes is much more lucrative: big data for genetics. That's where Recombine fits into FirstMark's investment thesis. More than a biotech company, it's a big data company, Turck argues. From his blog post Tuesday:

Recombine has ambitious plans to fully leverage Big Data technology to help decode the myriad aspects of our genome that are still not well understood.

Naturally, Bisignano agrees. "Genetics is entering a future where it is nothing but a data science," he says.

By processing all of the data from its tests, Recombine can glean insights about genes and diseases. The data is anonymous, and Recombine has already obtained Institutional Review Board (IRB) approval to conduct its first large-scale study. "We're getting really high-quality medical data that allows us to be more confident that the signal is outweighing the noise in our results," Bisignano says.

Recombine purposely avoided the direct-to-consumer market, where the best-known company, 23andMe, garnered the attention of the FDA and was briefly shut down last year. Bisignano says that 23andMe has done a great job of bringing awareness to genetic testing, and the company, backed by $188 million in venture funding, is doing good research to advance the technology around genetic testing. But 23andMe's mission is slightly different than Recombine's: 23andMe wants to empower people with more information about their genomes.

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But Bisignano says that this information isn't always that useful to people. "The average person's ability to understand their genetic data is not as high as we'd like to believe," he says. That's why Recombine has employed six full-time genetic counselors and works directly with doctors to help patients understand their test results.

In general, our understanding of the human genome only covers around 1.5% of its 6 billion data points, Bisignano says. Recombine hopes the infrastructure it is building can go after the other 98.5%.

The company has chosen fertility and childbirth as its first areas of focus. There are two products: CarrierMap, which determines the changes of passing on more than 200 genetic diseases to a child, and FertilityMap, which helps diagnose and treat infertility and frequent miscarriages. Launched in October, it is already a profitable multimillion dollar business for Recombine. CarrierMap was launched at the American Society for Reproductive Medicine conference in October last year, and has provided more than 7,000 tests since. The company is working with 10 of the country's top fertility clinics for its first Clinical-Translational Study, geared at helping to better understand and predict infertility based on complex genomic influencers.

Recombine's $3.3 million Series A funding will allow the company to build out a team of data scientists, salespeople, and engineers. To underscore that the company is focused on data, more so than biology, Bisignano is courting data crunchers from the finance world, because he wants people who understand high-frequency trading algorithms. "We're looking at people who specialize in data outside of genetics," he says.

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