Genetic testing company 23andMe has filed for bankruptcy protection, marking a dramatic downturn for a once-celebrated firm. The company also announced the immediate resignation of its co-founder and CEO, Anne Wojcicki, as it seeks to sell itself under court supervision.
Despite its financial struggles, 23andMe stated in a press release that it would continue operating during the sale process and assured customers that there would be no changes to the storage or security of their genetic data. However, concerns remain, with the Attorney General of California issuing a consumer alert on Friday, advising customers to delete their data due to the company’s financial distress.
A Rise and Fall in Genetic Testing
Founded in 2006, 23andMe became a pioneer in at-home DNA testing, allowing customers to explore their ancestry and health-related genetic traits through saliva-based test kits. The company attracted high-profile endorsements from celebrities such as Oprah Winfrey, Eva Longoria, and Snoop Dogg, and its valuation soared to $6 billion at its peak.
However, the company never turned a profit and has struggled to sustain its business model. After going public in 2021, it faced mounting financial challenges, including a costly lawsuit stemming from a 2023 data breach that exposed sensitive personal information of nearly seven million customers. Although DNA records were not compromised, hackers accessed details such as family trees, birth years, and geographic locations. The company later settled the lawsuit in September 2023.
As part of its cost-cutting measures, 23andMe laid off 200 employees, representing 40% of its workforce, just two months after the settlement. The company’s attempt to pivot towards a subscription-based model and drug development efforts also failed to generate sustainable revenue.
Leadership Shake-Up and Future Uncertainty
With Wojcicki stepping down, 23andMe’s Chief Financial Officer, Joe Selsavage, has been appointed interim CEO. Wojcicki will remain on the company’s board, despite previous resistance to third-party buyout offers.
The leadership changes come after a tumultuous period in which all board members, except Wojcicki, resigned last summer, citing dissatisfaction with buyout offers.
Privacy Concerns Over Genetic Data
As 23andMe navigates bankruptcy, concerns have arisen over the fate of customers’ genetic data. The company’s board chair, Mark Jensen, has reiterated its commitment to safeguarding customer data and ensuring transparency in any future transaction.
However, experts warn that genetic information is among the most sensitive personal data. In the UK, DNA data is classified as special category data under privacy laws, affording it legal protections if a company goes bankrupt or changes ownership. Similar concerns emerged last year when another DNA testing company, Atlas Biomed, ceased operations, leaving customers uncertain about their data’s security.
Privacy expert Prof. Carissa Veliz has previously highlighted the broader implications of DNA sharing, stating, “If you gave your data to 23andMe, you also gave the genetic data of your parents, siblings, children, and distant relatives who never consented to that.”
As 23andMe’s future remains uncertain, customers and investors are watching closely to see how the sale process unfolds and what it means for genetic data security.
