We will have two primary revenue streams. Firstly, we will charge a upfront fee for purchasing our field testing device and, secondly, we will have a recurring revenue stream from selling the microfluidic chips. We believe that we can maximize our revenues by making the hurdle to adoption of our field testing device as low as possible. Thus, we plan to sell the field testing device below our cost or even give out the device for free. We will recover our costs by charging a premium for the microfluidic chips, which are one time use only. Given that we have a patent on our chips, customers have to recurrently purchase chips from us, which will provides us with healthy and continuous cash flows. This business model has proven highly successful in other product categories such as razors, printers or cameras.
The most important step in designing a widely used product and building a successful company is finding the right product-market fit. Thus, it was crucial for us to continuously talk to our potential early adopters and gain valuable feedback for designing our product. It also helped us validate the need for our product. From the beginning we were in close cooperation with the leading Chytrid researcher in Germany Dr. Johannes Penner, who is a researcher at the University of Freiburg and a leading member at the amphibian conservation group Frogs & Friends. At later stages, we reached out to other leading Chytrid researchers and received positive feedback from the Zoological Society London, Royal Veterinary College and the Durrell Wildlife Conservation Trust. Especially encouraging were the talks with Dr. Mike Hudson and Dr. Chris Durrant, who repeatedly stressed how much trouble our field device would be saving them. Through these conversations, we received feedback from potential customers who are tackling Chytrid from all different angles. This allowed us to design a device that can be used in a wide range of use cases: from researchers to conservation groups to animal traders.
However, we also expanded our focus from Chytrid testing to Covid testing given the universality of our testing method. Positive first trials have earned us a $40k research grant from the Abu Dhabi government. If further trials conclude positively, we will be eligible for larger $200k research grant. This level of support from the Abu Dhabi government is evidence of how our innovative testing method can be used in a wide range of applications.
TAM: To calculate the total available market size we identified three key customer segments: Conservation groups, wildlife traders and researchers institutions. To identify the demand from conservation groups, we studied the German market in specific. There are 256 distinct location with regularly monitored frog fences. Dr. Penner confirmed to us that Chytrid testing is performed at these fences. Extrapolating these numbers to a global scale we get a market size of $900k. Using the CITES databank, which records all official international wildlife trade, we found out that on average of 60k amphibians are being legally traded across borders each year. After adjusting for illegal and domestic trade we get a market size of $1.75M for amphibian wildlife trade. Speaking to research universities in Germany and the UK we got estimates for their chytrid testing budgets. Extrapolating, these numbers to a global level we get a market size of $2.05M. Thus, the total TAM is $4.7M.
SAM: Initially, we will focus on the European and the US market, which we estimate to make up 70% of the TAM. This equals to $3.3M.
SOM: Given the clear advantages of our device, the concentration of our customers and the very positive validation of our product we believe we can gain a market share of 30% in the foreseeable future. This rounds to a SOM of $1M.
We recognize that these market sizes are not large enough to support a full commercialization of our product. This is why we already started testing a modified version of our device on COVID.
It is natural that COVID-19 testing is currently one of the most prioritized spheres in global healthcare diagnostics, therefore, we decided to point it out individually before moving onto the global RNA/DNA testing market.
TAM: The estimations for the global COVID testing market vary a lot, ranging from $10bln to $60 bln worldwide for 2021, with prospected growth up to $140 bln by 2027 [8]. We decided to take $20 bln as the median approximation to provide a decent degree of conservativeness in our assessment.
SAM: At this stage, we isolated the testing methodology which is comparable to our offering. The key defining factor was the search for RNA/DNA of the target pathogen. Target comparables included PCR and RT-PCR, which are the dominant COVID testing methods because of their high sensitivity and accuracy, as well as rapid antigen tests because of their comparably high speed and low price. Building on the data for Abbott’s COVID testing solution sales [1], we estimated the target methods as taking 50% of the total market, resulting in a serviceable market of $10 bln.
SOM: We finalized our estimations via adjusting for the target geographies (US and Europe) and possible demand “stickiness” stemming from the potential reluctancy of large laboratories to revise their contracts with their suppliers. Nonetheless, given the strong competitive advantages of the product, we expect a high potential penetration of 10% of the serviceable addressable market, resulting in an obtainable market of $5 bln.
TAM: We decided to divide the global testing market into several dominant categories: infectious disease testing, science and research, as well as industrial applications. Triangulating the data for the estimations of the global infectious disease testing market [5], global PCR testing market [2], and foods pathogen testing market [9], we came up with an estimation of $80 bln.
SAM: Similar to COVID testing, we isolated the testing methodology which is comparable to our offering, including PCR, RT-PCR, and antigen testing. Building on the data for Abbott’s COVID testing solution sales [1], we estimated the target methods as taking 50% of the total market, resulting in a serviceable market of $40 bln.
SOM: Similar to COVID testing, we finalized our estimations via adjusting for the target geographies (US and Europe) and possible demand “stickiness” stemming from the potential reluctancy of large laboratories to revise their contracts with their suppliers. Nonetheless, given the strong competitive advantages of the product, we expect a high potential penetration of 5% of the serviceable addressable market, resulting in an obtainable market of $2 bln.
Outperforming existing testing methods on speed, cost and user friendliness
Testing method works on all DNA/RNA
Lower specificity compared to PCR
No established reputation on the testing market
Our microfluidic chips works with any DNA or RNA. Thus, tests can be developed for every biological material.
Modifying tests for specific diseases/fungi is rapid and cheap
Regulatory challenges. Often tests need governmental approval for widespread use.
Approval processes could take long and be influenced by corporate interests
