Launched in 2010 and based in a converted toolshop in Leichhardt, in Sydney's inner west, Atomo Diagnostics has developed a testing platform which is making inroads into the industry globally. And winning the backing of the Gates-backed fund sends a strong message to the industry globally, Atomo Diagnostics founder John Kelly said.

Typically the Gates-backed Global Health Investment Fund will lend money to start-ups but rarely takes a direct stake. Negotiations in late 2015 to borrow $US6 million from the Gates-funded group soon broadened to include taking a direct shareholding.

In Atomo's latest financing round, the fund has put up most of the $4.5 million that has been raised, to emerge with an 8.4 per cent holding in the company. The former chief of Macquarie Bank, Alan Moss, has also chipped in some money, to take around a 3 per cent stake.

The fund raising has reduced the stakes of Atomo's two main holders - Kelly and Sydney businessman Lang Walker - to below 30 per cent each, with both ending up with a "smaller share of a bigger pie", Mr Kelly, who is also the chief executive, said.

"It sends a very strong message to the global market," Mr Kelly said of the US fund's decision to back his company. "Atomo is one of the few groups it has invested in directly."

Mr Kelly spent several years with Resmed, the local sleep apnoea products group which is now a player in the industry globally, and then with Unilife, developing key products behind a $15 million-plus partnering deal with Sanofi-Aventis in 2008 before launching Atomo.

Atomo began generating revenues around 18 months ago, but it is still burning cash as it transitions from start-up to its present high growth phase, which has also seen staffing rise from around five to 25.

"We could be cashflow positive very quickly but ongoing investment means it pushes becoming cashflow positive a little further out - but it makes the company more valuable," Mr Kelly said.

To date, between $10 million and $15 million has been invested in the business, before taking into account the $US6 million borrowed from the Gates fund and the latest financing round.

"This gives us more than $10 million in the war chest," Atomo's Mr Kelly said.

The latest funding will also see the managing partner of the Global Health Investment Fund, Dr Curt LaBelle join the Atomo board.

"Atomo has developed a unique platform enabling quick, accurate and affordable point-of-care and consumer diagnostics," Dr LaBelle said. "These solutions reduce error rates and improve care and have significant commercial potential in both the developing world and in developed healthcare markets."

Mr Moss said the company has developed "a remarkably user-friendly and accurate testing device which has the potential to assist greatly in detecting HIV and other diseases in Africa and globally".

Along with raising funds from existing and new investors, Atomo has received a grant from the NSW Medical Devices Fund for a digital HIV Self-Test along with a grant from the Australian Commonwealth for tropical fever tests.

The US fund, which has a range of corporate and government investors, focuses on so-called late-stage innovations in areas of challenges for public health such as malaria, pre-eclampsia, cholera, HIV and river blindness. It usually focuses on infectious diseases and maternal/infant health issues.