Predictiv is offering investors a SAFE subject to a $5.5 million valuation with no discount. This valuation is extremely attractive in comparison to other startups currently seeking funding, most of which have higher valuations. However, the lack of discount is not encouraging. Since Predictiv is still pre-product, the company also has no revenue, so the revenue-to-valuation multiple is also a mark against it. Due to these factors, the price score for Predictiv is middle of the road.

DNA testing seemed to be the next big idea a few years back. However, a major problem that companies like 23andMe and Illumina noticed was the lack of early adopters. Once the first batch of people who were willing to pay for a $99 dollar test were through, there weren’t many more taking their place. Predictiv will likely suffer from the same issue.

Another issue for Predictiv is the competition within the industry. Name recognition and word-of-mouth marketing are huge in this space, and companies like 23andMe and AncestryDNA are already known and trusted by consumers. It’s an added challenge for Predictiv to overcome this obstacle.  

Overall, the global DNA testing market generated $12.7 billion in revenue in 2019. This figure is projected to grow by a CAGR of 10.1%, hitting $21.26 billion by 2027. Predictiv’s market will be a fraction of this market, somewhat limiting its opportunities. However, the double digit CAGR is encouraging and helps to raise the company’s rating in this metric. Thus, the market score for Predictiv is above average.

Predictiv’s team is certainly one of its most compelling factors as a business. It was founded by Sajung Yun and Alex Rochegud. Yun has a biomedical sciences PhD, is an adjunct professor at Johns Hopkins in bioinformatics, and worked at the National Institute of Health (NIH) for five years. Rochegud is an entrepreneur who previously worked as a manager for accenture in their Belgium and Luxembourg markets. Sijung Yun is Predictiv’s chief science officer and has a PhD in physics from Boston University. He also  has more than nine years of experience working as a bioinformatics scientist at the NIH.

The mixture of scientific knowledge and business acumen make the Predictiv team well suited to lead a startup in the field of DNA testing. The team rating is the company’s highest across all five metrics as a result.

Predictiv intends to take its product a step further than the average DNA testing service, operating with a holistic approach to its genetic testing. Where other services need to be explicitly told what to search for, Predictiv aims to provide information on 20,000+ genes and 16,000+ diseases. The “digital twin” (as the company calls it) will also be able to simulate reactions to hundreds of different drugs. The “twin” is also constantly changing as the user changes, continuously monitoring and providing real-time data. Predictiv has also filed two patents for its technology, which will provide crucial defensibility to the company.

However, as mentioned earlier, the DNA testing market is crowded with well-established and well-known competitors. Predictiv will be aiming to steal market share from leaders like Ancestry and 23andMe. Notably, the distinction of offering information on diseases is not unique to Predictiv. 23andMe also provides a suite of health-related information to its users, in addition to its ancestral analysis. Predictiv will need to continuously expand the amount of information it can provide to its customers in order to stay competitive in this crowded market. However, the company has done a satisfactory job of this so far, and its above average differentiators score reflects this work.

Predictiv is currently in the pre-product phase of business, so it is difficult to gauge its current traction in the market. The company’s Form C filing is also empty, giving no financial data to go off of. The company claims to be in final discussions for contracts in the United States, India, and Southeast Asia with the aim of providing its product to healthcare professionals and hospitals in March. However, none of these contracts have been finalized, so Predictiv has no customers and no revenue. Its performance score is very low due to these factors.

Predictiv’s valuation may not be overly speculative, but its product is. As with any company in its pre-product phase, there is no guarantee that the visions Predictiv has for its DNA tests will succeed. Adding to the factors weighed against Predictiv, the market it is entering already has name brand competitors that consumers are comfortable and familiar with. Predictiv will face the difficult challenge of attracting consumer attention and then convincing them that its DNA tests are better than what they already know. At a price point of $790 per unit, that challenge will be a significant obstacle to the company’s success.

Predictiv’s proposed product would be able to differentiate itself from other genetic tests on the market, which could reinvigorate the interest of the general public. The executive team is solid, with a CEO and chief science officer well versed in the field of genomics and bioinformatics. The utilization of a B2B2C business model does expand the company’s potential customers, whereas other companies in a similar field market sell directly to the consumers. If Predictiv can partner with a prominent hospital or clinic, the company’s traction has the potential to grow substantially.

Predictiv’s holistic approach to DNA testing could differentiate its product from the many competitors it faces, and its business plan is more solid than simply marketing and selling straight to consumers. The executive team is promising, with relevant experience in the field as well as a solid entrepreneur in Alex Rochegud. However, the lack of a current product is cause for concern, as is the shrinking market interest noted by companies like 23andMe. Weighing all factors equally, Predictiv has been rated a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Ethan Thomas.