Once valued at $3.5B, 23andMe files for Chapter 11 bankruptcy

Four years after going public at a $3.5 billion valuation, 23andMe Holding Co. today filed for bankruptcy.

The company, which sells saliva-based genetic testing kits for consumers, will continue operating during the Chapter 11 proceedings. It plans to take out a $35 million loan to finance day-to-day activities. According to court documents filed in connection with the bankruptcy, 23andMe’s main priority will be finding a buyer.

“We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities,” said 23andMe board Chair Mark Jensen.

South San Francisco, California-based 23andMe launched in 2006 and raised more than $200 million from investors over the subsequent decade or so. In 2021, it went public through a special-purpose acquisition company, or SPAC, merger. The company started trading on the Nasdaq with a market capitalization of $3.5 billion.

Today’s bankruptcy filing follows years of financial difficulties. In 2024, 23andMe lost $681 million on sales of $192 million. It lost $312 million a year earlier. 

In a court filing, 23andMe Chief Restructuring Officer Matthew Kvarda pointed to low customer retention as one of the factors behind the bankruptcy. “The often ‘one-time’ nature of sales involving the company’s saliva collection kits resulted in a shrinking customer base and declining topline revenues,” the executive wrote.

In 2015, 23andMe expanded its focus beyond genetic testing kits by launching a drug development program. The plan was to use data from the company’s customers to develop new treatments. Last year, 23andMe scrapped the program and laid off more than 200 employees, or about 40% of its workforce at the time.

The company also licensed genetic data from customers to other drugmakers. In 2023, it inked a data licensing agreement with GSK plc worth at least $20 million. Reuters reported today that 23andMe has signed similar contracts with “at least” 30 pharmaceutical and biotech companies.

In response to today’s bankruptcy announcement, California Attorney General Rob Bonta issued an alert urging consumers to delete the data the company stores about them. If 23andMe is sold, any genetic data that users don’t delete could become available to the buyer.

Randolph Barr, chief information security officer at Cequence Security Inc., told SiliconANGLE in an email that 23andMe customers should proceed carefully.

“First, check if you opted into research studies,” he said. “23andMe has instructions on how to confirm consent for research, biobanking and individual data-sharing settings. Second, initiate the deletion of your data (though you’ll need to be logged in to do this). Lastly, and most importantly, read the privacy policy carefully. Make sure you fully understand what data they will retain, what they will keep, and what they can do with your data.”

In connection with the bankruptcy proceedings, 23andMe founding Chief Executive Officer Anne Wojcicki is stepping down. Joe Selsavage, who until now was the company’s chief financial officer, will become CEO on an interim basis.

Under an agreement with its creditors, 23andMe will seek to secure at least one binding acquisition offer by May 7. In a post on X, Wojcicki stated that she plans to place a bid. In the event that multiple takeover offers are submitted, 23andMe will hold an auction to “maximize the value of its assets.”

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