Late last month, genetic testing giant 23andMe filed for bankruptcy.
The San Francisco-based company — cofounded in 2006 by former healthcare investor Anne Wojcicki — rose to fame for offering genetic testing services directly to customers.
When the company went public in 2021, it was valued at just over $6 billion. Now, it says it had debts of $2.3 billion, about $126 million in cash and cash equivalents, and needs additional liquidity.
The company’s descent into financial uncertainty wasn’t sudden.
23andMe had struggled with its business model, failing to turn a profit almost two decades after it began selling direct-to-consumer DNA test kits. Demand for its premiere product — a one-time test — began waning around 2019, and its effort to provide more consumer value through additional services wasn’t enough to close the gap.
Then, in October 2023, hackers accessed the personal details of some users in a data breach that cost the company $30 million in a later settlement agreement. The breach also made potential new customers nervous about the security of their data and more resistant to purchasing kits.
The company’s announcement that it was filing for bankruptcy and seeking buyers has now further raised concerns among consumers