Key points from article :
23andMe, a well-known DNA testing company, has filed for bankruptcy protection, and its CEO and co-founder, Anne Wojcicki, has resigned. The company plans to sell itself under court supervision while continuing operations. This comes after financial struggles and a major data breach in 2023, which exposed personal details of nearly seven million customers, though DNA records were not compromised. The UK's data watchdog has proposed a £4.59 million fine for the breach, while California’s Attorney General has advised customers to delete their data.
Founded in 2006, 23andMe once had a valuation of $6 billion but has never been profitable. It went public in 2021 but faced declining revenue and customer retention issues. The company initially thrived on selling DNA test kits but struggled to develop a sustainable business model. Attempts to introduce a subscription service and pivot into drug development were unsuccessful. After a failed attempt by Wojcicki to take the company private, board members resigned in protest last year.
Hackers exploited old passwords to access customer data, raising concerns about privacy and security. Despite assurances that customer data remains protected, regulators are closely monitoring the situation. The UK's data protection laws classify genetic data as sensitive, meaning it has specific legal protections if a company changes ownership or ceases operations. This has fueled worries about what will happen to customer DNA records in case of a sale.
23andMe’s financial distress has also resulted in major layoffs, including 40% of its workforce last year. The company settled a lawsuit over the data breach but continued to face operational difficulties. The lack of repeat customers for DNA testing contributed to its downfall, and high-profile endorsements from celebrities like Oprah Winfrey and Snoop Dogg failed to revive interest. Interim CEO Joe Selsavage will now lead the company during the transition.
Experts warn that genetic data is uniquely valuable because it also contains information about relatives who never consented to its use. Privacy advocates argue that customers should be cautious when sharing DNA with companies that may not be financially stable. The situation has drawn comparisons to other failed DNA firms, where users were left uncertain about the fate of their sensitive data.
23andMe’s collapse highlights the risks of consumer genetic testing businesses and raises larger questions about the security of personal data. The company’s fate now depends on the outcome of the sale process, while regulators and customers await clarity on what will happen to their stored genetic information.
