In a surprising turn of events, tonight 23andMe filed for Chapter 11 bankruptcy protection in Missouri federal court. At the same time, Anne Wojcicki stepped down from her role as the company’s Chief Executive Officer, effective immediately. The company is best known for its direct-to-consumer genetic testing services. It filed with the court estimated assets and liabilities, estimated both at between $100 million and $500 million.
Since its debut as a public company in 2021 via a merger with a special purpose acquisition company, 23andMe has continued to experience financial woes. At the time of the merger, it valued the company at approximately $3.5 billion. However, even with this bold initiative, the company’s stock has been mostly trending down in recent years. This decline can be largely traced back to the difficulty of things like building sustainable, recurring revenue or creating sustainable businesses in research and therapeutics.
Like many other tech companies, the company has been dogged by privacy concerns. In October 2023, hackers accessed the genetic information of nearly 7 million customers, raising alarm over the security of 23andMe's genetic database. California Attorney General Rob Bonta was even faster on the draw. His office immediately released a consumer alert. He asked community members to consider removing their DNA from the organization’s platform.
Fast forward to March 2024, 23andMe’s independent directors decided to unilaterally act. So they created a blue-ribbon ad hoc committee, tasked with examining possible long-term directions for the company. The committee said it unanimously rejected an earlier proposal from CEO Anne Wojcicki to take the company private. As we wrote last week, 23andMe is in the midst of an aggressive corporate reorganization. If the court ultimately accepts its Chapter 11 plan to sell off its assets, the company will consider qualified bids through a 45-day process.
"There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering," stated Anne Wojcicki.
Wojcicki continues to stand by her pledge to advocate for consumer rights including privacy and transparency around the use of personal data.
"As I think about the future, I will continue to tirelessly advocate for customers to have choice and transparency with respect to their personal data, regardless of platform," she added.