Genetic testing company 23andMe has filed for Chapter 11 bankruptcy protection as it attempts to sell itself, marking a significant turn for a firm once valued at $6 billion.
The move comes alongside the resignation of co-founder and CEO Anne Wojcicki, who has been pursuing a buyout of the company but has faced multiple setbacks.
Despite the bankruptcy filing, 23andMe has assured customers that its operations will continue as usual and that there are no changes to how it stores, manages, or protects genetic data. However, California’s Attorney General has advised customers to consider deleting their data from the platform due to the company’s financial uncertainty.
Founded in 2006, 23andMe gained prominence with its at-home DNA test kits, offering insights into ancestry and health risks. However, after going public in 2021, the company struggled to find a sustainable business model. Customers often had little reason to return after purchasing a DNA report, and efforts to introduce a subscription service and expand into drug development did not yield the expected success.
The company also faced reputational damage following a 2023 data breach that compromised nearly seven million customer records. Although DNA information was not exposed, hackers gained access to personal details such as family trees and geographic locations. The fallout led to a $30 million legal settlement and further eroded consumer trust.
As part of its restructuring, 23andMe laid off 40% of its workforce in late 2023 and halted its drug development efforts. Wojcicki had attempted to take the company private but was met with resistance from the board. Now, she intends to make another bid to acquire the company during the bankruptcy proceedings.
Interim CEO Joe Selsavage, the company’s former chief financial officer, will take over leadership as the firm navigates its sale process under court supervision. 23andMe has secured a $35 million financing commitment to support operations during this period.
With input from Reuters, CNN, BBC, and the Guardian.
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