- 23andMe Holding Co. (ME) filed for bankruptcy in the U.S. on Sunday, with shares dropping over 43% to $1.01 in premarket trading on Monday, driven by a 2023 data breach exposing nearly 7 million customers’ data and declining demand for ancestry testing kits.
- Co-founder and CEO Anne Wojcicki resigned on Monday after failed buyout attempts, including a 41 cents per share offer valuing the company at $11 million, far below its current $48 million valuation and $6 billion peak in 2021.
- The company secured $35 million in financing to operate during the sale process, listing assets and liabilities between $100 million and $500 million, amid a halt in therapeutic development and a $30-million settlement from the breach-related lawsuit.
Shares of 23andMe Holding Co. (ME) are in free fall, plunging over 43% to $1.01 in premarket trading on Monday. The sharp decline comes after the company filed for bankruptcy in the U.S. on Sunday, driven by the dual challenges of a severe data breach and waning consumer demand for its core ancestry testing kits. Once a celebrated player in the consumer genetics space, valued at $6 billion at its peak in 2021, 23andMe now faces a stark reality with a market valuation of just $48 million—a figure that underscores the severity of its fall from grace.
The company’s troubles were compounded by a five-month-long data breach in 2023, which exposed the personal information of nearly 7 million customers. This incident not only eroded public trust but also triggered a $30-million settlement in a related lawsuit, further straining the company’s finances. In response to mounting challenges, 23andMe halted development of all therapeutic programs and laid off 200 employees late last year, signaling a retreat from its broader ambitions in personalized medicine. The bankruptcy filing lists assets and liabilities ranging between $100 million and $500 million, reflecting a precarious financial position despite a recent $35 million financing commitment secured on Sunday to keep operations afloat during the sale process.
Leadership upheaval has added another layer of complexity to the situation. On Monday, co-founder and CEO Anne Wojcicki stepped down after an unsuccessful campaign to take the company private. Wojcicki, who leveraged high-profile connections like her ex-husband and Google co-founder Sergey Brin to bolster early investments, had been pushing for a buyout since April of the previous year. Her most recent offer of 41 cents per share, valuing 23andMe at a mere $11 million, was rejected by the board—a decision that appears validated by the company’s current $48 million valuation, though still a shadow of its former worth. Wojcicki announced her resignation alongside her intent to make another bid via a post on X, though she provided no specifics. Replacing her on an interim basis is Chief Financial Officer Joe Selsavage, who steps into a role fraught with uncertainty as the company navigates its next steps.
The broader context of 23andMe’s struggles mirrors trends in the genetic testing industry. In 2021, the same year billionaire Richard Branson’s SPAC took 23andMe public at a $3.5 billion valuation, competitor AncestryDNA was acquired by Blackstone Group (BX). Both companies faced slowing sales, hinting at a saturated market for direct-to-consumer ancestry kits—a product that once captivated millions but has since lost momentum. For 23andMe, the pivot away from therapies and the fallout from the data breach have left it particularly vulnerable, unable to sustain the growth trajectory that once defined its narrative.
As 23andMe proceeds with its bankruptcy process, questions linger about its future. The $35 million lifeline offers temporary stability, but the absence of disclosed alternative buyout offers suggests limited immediate interest from outside parties. Wojcicki’s determination to reclaim control may yet shape the company’s path, though her previous bids have fallen short of convincing the board. For a company that pioneered accessible genetic insights, the current valuation of $48 million – down from $6 billion in just four years – serves as a sobering reminder of how quickly fortunes can shift in the volatile intersection of biotechnology and consumer trust. Whether 23andMe can reclaim its footing or becomes a cautionary tale remains an open question as it moves forward under interim leadership and financial restructuring.
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