In brief
Popular DNA testing service 23andMe has filed for bankruptcy protection, signaling significant financial turmoil within the company. Co-founder and CEO Anne Wojcicki has resigned as the firm seeks to sell itself under court oversight. Despite continuing operations, customers have been advised to delete their data due to reported financial distress. Once valued at $6 billion, 23andMe has struggled to turn a profit since going public in 2021. Recent data breaches and poor business model adaptations have compounded its challenges. In the midst of this turmoil, the company aims to reassure users about the protection of their data.
23andMe, a pioneer in DNA testing since its inception in 2006, has seen its share of ups and downs. After becoming a public entity in 2021, the company has reported consistent losses and struggled to redefine itself in a changing market. The firm recently faced a lawsuit resolution regarding a major data breach that compromised the privacy of approximately seven million customers. Although DNA data was not affected, sensitive information related to familial connections and locations was exposed because of lax security—a critical concern that has led to the Attorney General’s consumer alert in California.In a bid to stabilize its position, the company laid off 40% of its workforce, equating to around 200 employees, just two months after the data breach settlement. Joe Selsavage, the finance chief, has stepped in as interim CEO, while Wojcicki will remain on the board. The exodus of company directors last summer further illustrates the internal strife as they sought better buyout options from Wojcicki, which ultimately did not materialize.Despite a history of high-profile endorsements, including celebrities like Oprah Winfrey and Eva Longoria, 23andMe has struggled to innovate or create compelling offers for customers post-report. Attempts to introduce a subscription service were unsuccessful, and leveraging its extensive data for drug development has not produced significant outcomes. Mark Jensen, the board chair, attempted to reassure customers by committing to the security and transparency of user data throughout potential transactions, acknowledging the importance of genetic information under UK data laws. The controversy surrounding DNA data privacy puts added pressure on 23andMe to address customer concerns amidst its ongoing financial restructuring.
