23andMe Files for Bankruptcy
Once heralded as a trailblazer in consumer genetics, 23andMe has filed for Chapter 11 bankruptcy protection, marking a dramatic fall from its former $6 billion valuation. The filing was made Sunday night in Missouri federal court, capping off a tumultuous period for the company marked by financial struggles, failed business pivots, and a major cybersecurity breach.
Anne Wojcicki, co-founder and now-former CEO, has stepped down from her leadership role effective immediately but will remain on the board. Chief Financial and Accounting Officer Joseph Selsavage has been named interim CEO, according to documents filed with the U.S. Securities and Exchange Commission.
"We have had many successes, but I equally take accountability for the challenges we have today," Wojcicki wrote on X. "My belief in the company and its future is unwavering."
A Fall from Disruptive Heights
Founded in 2006, 23andMe pioneered the direct-to-consumer DNA testing market, offering affordable at-home kits that provided insights into ancestry and genetic health risks.
In 2021, it went public through a SPAC merger, securing a $3.5 billion valuation. But the optimism quickly faded. Despite millions of users and a vast genetic database, 23andMe struggled to convert its success into sustainable, recurring revenue. Its attempts to expand into drug discovery and therapeutic development failed to gain traction.
By Monday morning, the company’s market capitalization had plummeted to around $25 million — a staggering 99.6% loss in value from its peak.
Financial and Legal Turmoil
According to the bankruptcy filing, 23andMe has between $100 million and $500 million in assets, and an equal amount in liabilities. The company now aims to sell off its assets through a court-approved Chapter 11 plan, during which it will solicit qualified bids over a 45-day period.
Wojcicki, despite her resignation, intends to participate as an independent bidder in that process.
Notably, a special committee of independent directors had already rejected multiple proposals from Wojcicki to take the company private, most recently earlier this month, stating the offers were not in the best interest of shareholders.
Privacy Breach and Public Scrutiny
The financial downturn wasn't the only headwind. In October 2023, hackers accessed the data of nearly 7 million customers, sparking significant concerns over genetic privacy. The breach prompted California Attorney General Rob Bonta to issue a consumer alert, urging individuals to consider deleting their personal genetic data from the company’s database.
Despite the ongoing sale process, 23andMe has stated it will maintain its current protocols for data storage and protection, and that operations will continue uninterrupted for customers.
Wojcicki, in her parting note, emphasized her continued advocacy for consumer data rights: “I will continue to tirelessly advocate for customers to have choice and transparency with respect to their personal data, regardless of platform.”
The End of an Era
23andMe's rise and fall is a cautionary tale of early disruption failing to translate into long-term viability. As it now fights for survival through asset sales and restructuring, the future of consumer genetics — and the massive trove of sensitive data it has accumulated — hangs in the balance.
