| Key Points: – Genetic testing company 23andMe has filed for Chapter 11 bankruptcy, struggling with declining revenue, cybersecurity concerns, and failed business expansions. – Anne Wojcicki has resigned as CEO, with Joseph Selsavage stepping in as interim CEO. – The company aims to sell its assets through a court-approved process, while Wojcicki has expressed interest in bidding to regain control. |
Once a trailblazer in consumer DNA testing, 23andMe has filed for Chapter 11 bankruptcy protection after years of financial struggles and failed business pivots. The company, which was once valued at $6 billion, is now worth just $25 million as it grapples with a collapsing business model, cybersecurity concerns, and increasing regulatory scrutiny.
Founder Anne Wojcicki has stepped down as CEO effective immediately but will remain on the board. In her place, the company has appointed Joseph Selsavage as interim CEO as it navigates the bankruptcy process.
Wojcicki acknowledged the company’s challenges in a statement, saying, “There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering.”
Founded in 2006, 23andMe gained massive popularity with its at-home genetic testing kits, allowing customers to trace their ancestry and assess genetic health risks. The company’s early success led it to go public in 2021 through a special purpose acquisition company (SPAC) merger, which valued it at $3.5 billion.
However, the business struggled to generate recurring revenue beyond its one-time test kit sales. Attempts to transition into drug discovery and research partnerships failed to gain traction. Additionally, the company was hit with privacy concerns following a 2023 data breach that exposed the genetic information of nearly 7 million users, further damaging consumer trust.
According to court filings, 23andMe has between $100 million and $500 million in both estimated assets and liabilities. The company has stated that its primary goal is to sell its assets through a court-approved process over the next 45 days.
Wojcicki has indicated that she plans to be an independent bidder in the process, potentially seeking to take the company private after her previous takeover offers were rejected by 23andMe’s special committee.
Beyond financial troubles, the company continues to face scrutiny over its handling of sensitive consumer data. Last week, California Attorney General Rob Bonta issued a warning urging customers to reconsider keeping their genetic data stored with 23andMe, citing the risks of future breaches.
Despite these concerns, 23andMe has assured customers that there will be no immediate changes to how it stores or manages genetic data throughout the bankruptcy proceedings.
The future of 23andMe remains uncertain as the company seeks a buyer for its assets. While Wojcicki has signaled her interest in reclaiming control, potential bidders may be wary of the company’s financial instability and reputational damage.
For investors, this marks another cautionary tale of once-hyped SPAC deals that failed to deliver long-term value. As 23andMe fights for survival, the broader genetic testing industry must grapple with growing privacy concerns and the challenge of building sustainable business models beyond one-time test sales.