COVID-19 and Trump visa ban leave South Africa biotech startup in limbo as it plots move to Seattle – GeekWire
Jason Haddock had big plans for the rollout of his health tech startup in the U.S.
The CEO of 3X4 Genetics, a South African genetic testing company, had attracted an investor with sizable funding and developed a go-to-market strategy with plans for elaborate in-person events. Haddock and his co-founder Yael Joffe had sold their homes and were on the verge of moving to Seattle where they planned to manage 3X4’s impending growth.
Then COVID-19 hit and President Trump put a halt on employment-based non-immigrant visas.
Half a world away from Seattle, Haddock has been left in limbo, dreaming of the chance to get to the city and immerse himself in the booming tech and science communities.
“My entire life and my business partner’s life has been in a holding pattern for the last nine months,” Haddock said this week during a video chat with GeekWire. “We had our entire world ripped out from under us in a number of different ways.”
Launched in 2017, 3X4 Genetics is a take on at-home DNA testing, made popular by such companies as 23andMe and Ancestry. The company partners with health care practitioners to prescribe the tests and facilitate any treatment related to the results.
People turn to genetic testing for answers in coping with a wide range of chronic illnesses from cancer to migraine headaches. Others are seeking guidance around weight loss or enhanced sports performance. Haddock said what differentiates 3X4’s nutrigenomics work from competitors is that the test results focus significantly on what nutrition a patient can look at to improve their health.
“We created a blueprint or an experience which is very visual,” he said. “It allows your physician to have a more meaningful conversation with you because you can at least follow and understand what’s going on.”
3X4 has attracted more than 200 practitioner partners and has raised $4.5 million through Tony Hsu at San Diego-based Alethea Capital Management, whose backing was contingent on the startup moving to the U.S. Haddock and Joffe have gone through a lot of hoops to move their IP out of South Africa and establish a Delaware corporation that would own a 3X4 South African subsidiary, allowing the executives to move on L-1 visas.
“All of that took place from the middle to the end of 2019. So by the end of 2019, we were all feeling kind of raring to go,” Haddock said.
He called the marketing strategy set to begin in 2020 a “thing of beauty,” with culinary genomic events, health professionals, celebrity chefs and sponsors lined up to “talk about all of the cool stuff that we do.”
In January 2020, 3X4 hired two people to start at its office near Seattle, working out of a WeWork in Bellevue, Wash.
“So, when [COVID] hits, our sales dropped to zero. We had a live-events-based marketing strategy that was completely useless,” Haddock said, describing the economic fallout that impacted businesses around the world. “We were not in a great place.”
Fast forward to June 2020, and Haddock said he received the wonderful news that he had received his visa — “and I was not able to use it.”
In a moved that rippled through the tech industry, President Trump issued an executive order designed to prioritize the employment of American workers during the COVID-19 crisis. Many viewed it as an extension of the Trump administration’s ongoing attempts to curb legal immigration to the U.S.
The Migration Policy Institute estimated that Trump’s action had the potential to block a total of 54,000 foreign nationals from entering the U.S. as immigrants or nonimmigrant workers each month from July through December 2020.
Xiao Wang, CEO of Seattle-based online immigration services startup Boundless, said that between funding issues, COVID shutdowns, and general political turmoil, we’re seeing some of the longest backlogs for applications in recent memory.
“For those who are waiting, there’s really only one option, which is to stay patient,” Wang said. “If there are extenuating circumstances, they can reach out to their elected official in Congress. They have so much inbound volume now that pretty much every office has at least one staffer dedicated to constituent immigration issues. They can get information from U.S. Citizenship and Immigration Services that lawyers or anyone else cannot.”
Haddock places his hope on the incoming Biden administration and a rapid change of policy around immigration — a sentiment echoed by Wang and Boundless.
“Especially with the Democrats flipping the Senate in Georgia, there’s confidence that comprehensive immigration reform is likely for the first time since 1965,” Wang said, pointing to a number of predictions his company has made for 2021 and immigration.
With 25 employees in South Africa, and four in the U.S., working from a WeWork in Seattle’s South Lake Union neighborhood now, Haddock credits their investor Hsu with not “running for the hills” and seeing the long-term potential of the business. The goal is to get to Seattle and work on forming relationships with companies such as Amazon.
“We’re already working on next generation of products, starting to look at using information from devices and other kinds of contextual information sources,” Haddock said. “So there’s going to be more and more focus on the technology side of the business.”
In the meantime, 3X4 has shifted to a digital and influencer-based strategy and “lucked out a bit.”
“The reason for that is that we provide a genetic test, which is something that’s easy to ship to someone. They do a swab, they put the swab back, we send it to the lab, we outsource our labs,” Haddock said. “So we had everything in place to be able to essentially run telehealth.”
For now, Haddock and Joffe are running a U.S. business and digital marketing strategy out of Cape Town as they wait. They just raised their second Series A funding round of $2 million, but even if Biden comes in and confirms all visas are open, the challenge of COVID-19 will remain, and countries like South Africa will be far down the list when it comes to vaccine distribution, Haddock said.
“There’s so many different factors at play. It just leaves you in this process where you can’t make any plans,” he said. “You’ve just got to do the best you can. When all of the stars and planets align, you’ve just got to kind of take advantage and move quickly.”