23AndMe filed for Chapter 11 Bankruptcy Protection as it was once a flying DNA test startup with a valuation of nearly $6 billion.
The filing landed in Missouri federal court on Sunday night. Plus, another big move came. Co-founder and longtime CEO Anne Wojcicki quickly resigned from her role. She remains on the board, but Joseph Selsavage is the company’s CFO and has been intervening as interim CEO for now.
“We have had many successes, but we have been accountable for today’s challenges,” Wojcicki wrote in an early morning X post on Monday. “While there is no doubt that the challenges 23andme faces through its evolving business model are real, my belief in the company and its future is unshakable.”
This is an incredible fall for a company that once committed to making personal genetics mainstream. Wojcicki led 23andme from the sloppy beginnings in 2006 to peak. This was valued at $3.5 billion, including the 2021 public debut of SPAC fuel. However, the company did not find a way to turn early topics into a sustainable business model.
“We are accountable for today’s challenges,” Wojcicki posted to X early Monday.
Things were quickly unleashed. The company’s shares are currently trading at just $1, a 44% decline in pre-market trading, and it has hovered around $25 million in market capitalization.
The company said it would begin the sales process for court supervision, hoping to find a buyer for the property within 45 days. As an independent bidder, Wojcicki still wants to be a part of its future.
“After a thorough assessment of the strategic alternative, we determined that the court’s teacherized sales process was the best way to maximize the value of the business,” wrote Marc Jensen, chairman of the board’s special committee, in a statement.
Jensen added that the bankruptcy process will help the company manage its debt and maintain its core business, including data privacy obligations and employee support. “We believe in the value of our people and assets and hope that this process will allow our mission.”
According to the company, customer data will continue to be processed during the sales process. “We’re committed to keeping our customer data safe,” Jensen said.
23andme ascending and descending
The news of 23andme’s bankruptcy was no surprise. A year ago we published a piece titled “The Rise and Fall of 23andMe.” When it comes to technology unicorns, 23andMe has fallen 96% in its value since it hit a high of $17.65 per share in early 2021.
“23AndMe stock has been freefalling in recent years as it has struggled to generate recurring revenue and create viable research and treatments. On Monday morning, the company has a market capitalization of around $25 million,” CNBC reports.
A year ago, 23andme confirmed that hackers had stolen ancestor data for 6.9 million users, including records of “the wealthiest people living in the United States and Western Europe.” The company initially said the hackers violated personal data for about 0.1% of their customers, representing around 14,000 individuals.
Meanwhile, the company is under scrutiny. Privacy concerns have been 23andme for years. Last week, California Attorney General Rob Bonta issued a warning urging people to consider removing DNA data entirely from the platform.
As part of its bankruptcy filing, 23AndMe listed its estimated assets and liabilities in the range of $100 million to $500 million, respectively.
The company has been exploring options for several months. A special board was established last March, with the weight of the next step. Wojcicki submitted several proposals to keep the company private, but none of them passed. Earlier this month, the board unanimously rejected her latest pitch.
Wojcicki said it will continue to advocate for transparency and user control over genetic data. Whether 23andme will survive long enough to become a part of its future is still an open question.
Founded in 2006 by Linda Avey, Paul Cusenza and Anne Wojcicki, 23andme was a pioneer in the individual DNA testing market, providing genetic insights into consumer ancestry and health. Despite initial success, the company is struggling with profitability. The business model, which relied on customers to undergo one-time testing, continued to sought new revenue streams from 23andMe, including failings in subscription services and drug development ventures.
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