The once-pioneering genetic testing company 23andMe has filed for bankruptcy, marking a dramatic fall from its peak popularity. The announcement comes amid declining sales, a high-profile data breach, and a shifting landscape in the direct-to-consumer DNA testing industry.
The Rise of 23andMe
Founded in 2006 by Anne Wojcicki, 23andMe revolutionized consumer genetics by offering an affordable mail-in DNA testing kit. For under $200, customers could uncover their ancestry and genetic health traits, making the service a popular holiday gift during the DNA-testing craze. At its height, the company amassed 15 million customers and went public in 2021, capitalizing on the growing demand for personalized health insights.
Security Breach and Business Struggles
Despite its early success, 23andMe faced mounting challenges, including a devastating 2023 hacking incident that compromised the personal data of 6.9 million users. The breach exposed sensitive genetic information, names, birth years, locations, and health details—raising serious privacy concerns. To address the fallout, the company agreed to a $37.5 million settlement for affected users.
Compounding its troubles, 23andMe has struggled with declining sales as consumer interest in genetic testing waned. By November 2023, the company laid off 40% of its workforce, signaling deeper financial distress.
Bankruptcy and Leadership Changes
On Sunday, 23andMe announced that it had filed for Chapter 11 bankruptcy in Missouri, seeking to reorganize its business and find a potential buyer. The company also rejected a takeover bid from its co-founder and CEO Anne Wojcicki, who subsequently resigned but remains on the board.
In a statement on social media platform X, Wojcicki expressed disappointment over the rejection of her bid but reaffirmed her commitment to the company. She also clarified that stepping down as CEO was a strategic move to position herself as an independent bidder for 23andMe’s assets.
What’s Next for 23andMe Users?
With the bankruptcy announcement, tech columnist Geoffrey Fowler of The Washington Post advised customers to consider deleting their genetic data due to concerns about its potential sale or transfer to new ownership. As 23andMe seeks a buyer, questions remain about how consumer DNA data will be handled and whether privacy safeguards will be maintained.
The company’s stock took a heavy hit, plunging nearly 50% to just 92 cents on Monday, reflecting investor concerns over its uncertain future.
Lessons from 23andMe’s Downfall
The collapse of 23andMe serves as a warning about the challenges facing tech-driven health startups. While genetic testing remains a fascinating and valuable tool, companies operating in this space must prioritize consumer trust, data security, and long-term sustainability.
For users, this case underscores the importance of data privacy. When sharing personal information—especially something as sensitive as DNA—it’s crucial to understand how companies store, use, and protect that data.
As 23andMe navigates its next chapter, the broader genetic testing industry will be watching closely. Will a new buyer revive the brand, or does this bankruptcy signal the decline of consumer DNA testing as a mainstream service? Only time will tell.
Source: AFP
