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Doctors and nurses working at a hospital. Photograph by Getty Images/Tetra images RF

Color Genomics raises $15 million to make medical testing cheaper

Apr 21, 2015

With a $1,500 to $4,000 price tag, genetic testing is not accessible to many Americans unless covered by insurance. For example, half of the women who carry two of the best known gene mutations linked to higher chances of breast and ovarian cancers do not qualify for the test under their coverage.

A Silicon Valley company made up of former developers from Google (goog) and Twitter (twtr), Color Genomics, is hoping to change this by cutting the costs of genetic testing for breast and ovarian cancer risk.

For a fraction of the cost of current genetic testing, $249, Color offers comprehensive genetic testing with a "spit kit" ordered online and sent to recipients by mail. After the kits are returned, Color analyzes 19 genes—including BRCA1 and BRCA2, the two gene mutations related to breast and ovarian cancer. After receiving results, testers will be able to get in touch with board-certified genetic counselors at Color about the next steps based on results and a screening prevention plan.

Silicon Valley venture capitalists and luminaries are betting that Color is going to democratize genetic testing. The startup has raised $15 million in funding from Khosla Ventures, Formation8, Steve Jobs’ wife Laurene Powell Jobs, Cisco chief technology officer Padmasree Warrior, Twitter executive Katie Stanton, Eventbrite co-founder Julia Hartz, Yahoo co-founder Jerry Yang, PayPal co-founder Max Levchin, Dropbox co-founder Drew Houston, and Box co-founder Aaron Levie.

As Color's CEO and cofounder Elad Gil explains, the company has taken existing testing processes, and optimized every step. “There are a lot of pieces that can be automated,” he adds.

For background, Color is a laboratory developed test that is run in Color’s lab under federal regulatory standards that apply to all clinical laboratory testing. Color is a physician-ordered test, similar to other genetic tests for BRCA 1 and BRCA2. Consumers will either need to have their own physician order the test, or ask a Color physician to approve a request for a test.

This is an important differentiator from Google-backed 23andme, which was ordered by the FDA last year to stop selling its genetic testing kits. Because 23andme tested for over 200 genetic markers, the FDA deemed the kits as medical devices that needed regulatory approval. Earlier this year, 23andme, which was founded by Anne Wojcicki, was cleared to test for Bloom Syndrome, but has yet to be cleared for other diseases.

Color is currently collaborating with healthcare providers at University of Pennsylvania and University of California at San Francisco. In addition, several notable genetics experts have been collaborating with the company, including Dr. Mary-Claire King, who discovered the BRCA1 gene.

For Color’s cofounders and team, cancer, and specifically the BRCA1 and BRCA2 gene, are close to home. Othman Laraki, who previously headed growth for Twitter, is a carrier of the BRCA gene. His mother is also a carrier, and has had multiple family members who have been diagnosed with breast cancer “I’m tied to it forever,” he says.

Another team member has lost two grandparents to rare cancers and worked on cancer genetics for a Ph.D., while a third is a physician who has worked on breast cancer treatment.

Color is also launching the “Every Woman Program,” which works with cancer centers to provide genetic testing for patients who are unable to afford it.

For more about 23andme, watch this Fortune video:

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