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DNA testing firm 23andMe has filed for bankruptcy amidst declining demand and the fallout from a significant data breach in 2023. The company intends to sell itself while continuing operations.
Co-founder Anne Wojcicki has stepped down as CEO after multiple unsuccessful attempts to take the company private. However, she plans to make another offer to buy the company, according to a post on X. The company has secured $35 million in financing to support operations during the sale process.
Shares of 23andMe plummeted following the announcement and Wojcicki’s resignation. The company’s market value once peaked at $6 billion in 2021, fueled by the popularity of its DNA testing kits.
The bankruptcy filing follows concerns raised by officials, including the California Attorney General, regarding the security and potential sale of customer genetic data. 23andMe asserts that the bankruptcy proceedings will not compromise customer data protection.
The company has faced challenges in retaining customers after their initial DNA test. Competition from rivals like AncestryDNA, owned by Blackstone, has also intensified.
In 2023, a data breach exposed the personal information of nearly 7 million users, severely damaging the company’s reputation. 23andMe later agreed to a $30 million settlement related to the incident.
Prior to the bankruptcy, 23andMe laid off 200 employees and ceased therapy development as part of a restructuring effort.
What Happens to Your Genetic Data?
23andMe has stated that any potential buyer will be legally bound to adhere to data protection regulations. The company has existing agreements with pharmaceutical and biotech firms, including GSK, granting access to its database.
Experts recommend that concerned customers consider deleting their data from 23andMe’s platform. However, complete removal cannot be guaranteed, especially if the data has already been anonymized or shared with third parties.
Joe Selsavage, the current Chief Financial Officer, will serve as interim CEO. Wojcicki’s last offer valued 23andMe at approximately $11 million.
The company listed its assets and estimated liabilities between $100 million and $500 million in the bankruptcy filing.