DNA testing company 23andMe has filed for bankruptcy protection. Meanwhile, co-founder and CEO Anne Wojcicki has resigned immediately. Now, the company plans to sell itself under court supervision.
Despite financial struggles, 23andMe assured customers that its operations would continue. In a press release, the company stated, “There are no changes to the way the company stores, manages, or protects customer data.”
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Financial Struggles and Data Breach
Previously, 23andMe was a leader in at-home DNA testing. At its peak, investors valued the company at $6 billion (£4.6 billion). However, the company has faced mounting challenges in recent years. Although it went public in 2021, it has never turned a profit.
Moreover, a massive data breach in 2023 further damaged the company’s reputation. Hackers accessed personal information from nearly seven million users by exploiting old passwords. As a result, they obtained details like family trees, birth years, and locations. Nevertheless, 23andMe insisted that DNA records remained secure.
Soon after settling a lawsuit over the breach, the company laid off 200 employees, cutting 40% of its workforce.
Leadership Changes and Failed Strategies
Following Wojcicki’s departure, Chief Financial Officer Joe Selsavage has stepped in as interim CEO. However, Wojcicki will remain on the board. Previously, she attempted to take the company private but rejected third-party takeover offers.
Meanwhile, 23andMe struggled to keep customers engaged. Once users purchased a DNA test, they had little reason to return. In response, the company introduced a subscription service. Unfortunately, it failed to attract enough subscribers. Similarly, efforts to use its genetic database for drug development also collapsed.
Loss of Investor Confidence
At one point, 23andMe received high-profile endorsements from celebrities like Oprah Winfrey, Eva Longoria, and Snoop Dogg. However, investor confidence has steadily declined. Last summer, all board members except Wojcicki resigned. They left after failing to secure a buyout deal from her.
Adding to the company’s troubles, California’s Attorney General issued a consumer alert last Friday. He advised customers to delete their data due to 23andMe’s “reported financial distress.”
Now, as bankruptcy proceedings move forward, the company’s future remains uncertain.
