San Francisco, CA – March 24, 2025 – 23andMe, the once-celebrated pioneer of at-home DNA testing, has filed for Chapter 11 bankruptcy protection, signaling a dramatic fall from grace for a company that was valued at $6 billion just a few years ago. Alongside the filing, co-founder and CEO Anne Wojcicki announced her immediate resignation from the top post, though she will remain on the company’s board and has expressed her intent to bid for its assets as an independent buyer. The bankruptcy proceedings, initiated in the U.S. Bankruptcy Court for the Eastern District of Missouri, have sparked widespread concern over the fate of the genetic data of more than 15 million customers, prompting California’s Attorney General to issue a stark warning about privacy risks.
The announcement, made late Sunday night, marks the end of a tumultuous chapter for 23andMe, a Silicon Valley darling that rode the wave of consumer curiosity about ancestry and health predispositions to mainstream success. Founded in 2006 by Wojcicki, Linda Avey, and Paul Cusenza, the company promised to democratize access to genetic information through its saliva-based test kits. At its peak, 23andMe boasted high-profile endorsements from celebrities like Oprah Winfrey and a valuation that soared following its 2021 public debut via a special-purpose acquisition company (SPAC) backed by billionaire Richard Branson. Yet, despite its early triumphs, the company has struggled to find a sustainable business model, grappling with declining demand, a devastating data breach, and mounting financial losses.
The Chapter 11 filing is designed to facilitate a court-supervised sale of “substantially all” of 23andMe’s assets, a process the company says will “maximize the value of its business” while allowing it to continue operations in the interim. If approved by the bankruptcy court, 23andMe plans to solicit bids over a 45-day period, potentially culminating in an auction if multiple offers emerge. The company has secured $35 million in debtor-in-possession financing from JMB Capital Partners to keep its operations afloat during this period, a move that underscores its intent to maintain business as usual for now.
Mark Jensen, chair of the Special Committee of the Board of Directors, described the decision as the result of “a thorough evaluation of strategic alternatives.” In a statement, he emphasized that the court-supervised process would “advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities.” Jensen also expressed hope that the sale would preserve the company’s mission of “helping people access, understand, and benefit from the human genome,” a vision that has guided 23andMe since its inception.
For Wojcicki, the bankruptcy filing represents both an end and a new beginning. In a post on X early Monday morning, she acknowledged the company’s struggles while reaffirming her belief in its potential. “We have had many successes but I equally take accountability for the challenges we have today,” she wrote. “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.” Her resignation, she explained, was a strategic move to position herself as an independent bidder in the upcoming sale. “While I am disappointed that we have come to this conclusion and my bid was rejected, I am supportive of the company and I intend to be a bidder,” she added.
Wojcicki’s exit follows months of tension with the company’s board, particularly after her repeated attempts to take 23andMe private were rebuffed. Her most recent offer earlier this month—valuing the company at just $11 million, a fraction of its $48 million market value at the time—was unanimously rejected by the board’s special committee. That offer came on the heels of a failed bid in July 2024, which had been torpedoed when her private equity partner, New Mountain Capital, withdrew from the deal. The board’s resistance to her proposals culminated in a rare mass resignation of all seven independent directors in September 2024, a move that underscored deep strategic divides within the company.
23andMe’s descent into bankruptcy caps a series of setbacks that have eroded its once-lofty standing. After going public in 2021, the company’s stock briefly soared, pushing its market capitalization to $6 billion and making Wojcicki, who held 49% of the voting stock, a billionaire. The allure of its core product—a $99 DNA test kit that offered insights into ancestry and health risks—drove millions of consumers to spit into tubes and mail them back to the company’s labs. By 2025, 23andMe had amassed a database of genetic information from over 15 million customers, a treasure trove that held immense potential for research and drug development.
But the company’s success proved fleeting. Demand for its one-time DNA tests waned as the novelty wore off, and efforts to pivot to a subscription-based model—offering ongoing health updates and personalized wellness plans—failed to gain traction. Meanwhile, an ambitious push into therapeutics, aimed at leveraging its genetic database to develop new drugs, stalled amid regulatory hurdles and lackluster results. By the first nine months of its current fiscal year, 23andMe reported a 7% decline in revenue and losses of $174 million, a stark contrast to its earlier promise.
The company’s woes were compounded by a massive data breach in October 2023, when hackers accessed the personal information of nearly 7 million customers, including sensitive genetic and ancestry data. The breach, which appeared to target Jewish and Chinese users, sparked a class-action lawsuit accusing 23andMe of failing to adequately protect its customers. The company settled the suit in September 2024 for $30 million and agreed to provide three years of security monitoring, but the damage to its reputation was irreparable. In November, 23andMe slashed 40% of its workforce—over 200 employees—and shuttered its therapeutics division in a desperate bid to cut costs, yet these measures failed to stem the financial bleeding.
As 23andMe navigates bankruptcy, the fate of its vast genetic database has emerged as a pressing concern. With the company poised to sell its assets, questions abound about who will ultimately gain control of the DNA data of over 15 million individuals—and what they might do with it. The California Attorney General, Rob Bonta, wasted no time in sounding the alarm. On Friday, just days before the bankruptcy filing, Bonta issued a consumer alert urging 23andMe customers to exercise their legal rights under state law to delete their genetic data and destroy any remaining samples held by the company.
“Given 23andMe’s ongoing financial distress and the trove of sensitive consumer data it has amassed, we are deeply concerned about the potential risks to Californians’ privacy,” Bonta said in a statement. “Consumers should consider taking immediate steps to protect their personal information.” The alert highlighted the 2023 data breach as a cautionary tale, noting that the company’s financial instability could make it more vulnerable to exploitation by bad actors.
23andMe has sought to reassure customers, insisting that the bankruptcy process will not alter its data practices. “There are no changes to the way the company stores, manages, or protects customer data,” the company stated, adding that “data privacy will be an important consideration in any potential transaction.” Jensen echoed this sentiment, pledging that any buyer would be required to comply with applicable privacy laws. Yet, experts remain skeptical. John Bringardner of Debtwire warned that “personal data collected by 23andMe has always been at risk,” pointing to the 2023 breach as evidence of the company’s vulnerabilities. He noted that litigation stemming from the incident had ballooned its liabilities, contributing to the current crisis.
For customers, the options are limited but not nonexistent. 23andMe allows users to delete their accounts by logging in and submitting a request, followed by a verification email. However, once the company’s assets are sold, the enforceability of such deletions could hinge on the policies of the new owner—a prospect that has fueled anxiety among users and privacy advocates alike. 17GEN4.com
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