By Bhanvi Satija, Anusha Shah and Surbhi Misra
(Reuters) -23andMe on Sunday filed for bankruptcy within the U.S. after scuffling with weak demand for its ancestry testing kits and a 2023 data breach that damaged its status.
The corporate’s shares fell 50% to 88 cents in Monday trading after co-founder Anne Wojcicki, who made multiple failed takeover bids, resigned as CEO. 23andMe didn’t say whether there are other interested bidders. It would proceed to operate in the course of the sale process, having secured $35 million in financing over the weekend.
Officials, including California Attorney General Rob Bonta, had questioned what would occur to the genetic data collected by 23andMe, though the corporate’s privacy policies say that the information might be sold to other firms. The corporate said the bankruptcy process is not going to affect the way it stores, manages or protects customer data.
23andMe garnered numerous attention from investors when it was first taken public via a special-purpose acquisition vehicle (SPAC) run by billionaire Richard Branson at a $3.5 billion valuation in 2021. Its market value peaked later that yr at nearly $6 billion attributable to booming interest in DNA testing kits but demand has waned since, hurting 23andMe and its Blackstone-owned rival AncestryDNA.
Sales of the buyer kits steadily picked up in the course of the holiday season, but 23andMe has struggled to retain customers mainly because people would use the kits once and see little reason to order one other one. Bernstein analysts have said that the marketplace for ancestry testing kits could be near tapped out.
In 2023, hackers exposed the private data of nearly 7 million 23andMe customers over a five-month period, dealing a serious blow to the corporate’s status and compounding its growth problems. The breach raised alarm amongst customers concerned about their privacy and the way DNA-testing firms handle their data.
23andMe eventually agreed late last yr to a $30 million settlement in a lawsuit related to the breach.
The San Francisco-based firm has also laid off 200 employees and stopped the event of all therapies as a part of what shall be a serious overhaul.
Wojcicki has been pushing for a buyout since last April, but has been rebuffed by 23andMe’s board. She reportedly used her contacts, including ex-husband and Google co-founder Sergey Brin, to assist drive initial investments. She shall be replaced by Chief Financial Officer Joe Selsavage on an interim basis.
Wojcicki said, in a post on X on Monday, that she intends to make one other bid, without giving details. Her last offer of 41 cents per share valued 23andMe at about $11 million.