By Bhanvi Satija, Anusha Shah and Surbhi Misra
(Reuters) -23andMe on Sunday filed for chapter within the U.S. after scuffling with weak demand for its ancestry testing kits and a 2023 knowledge breach that broken its status.
The corporate’s shares fell 50% to 88 cents in Monday buying and selling after co-founder Anne Wojcicki, who made a number of failed takeover bids, resigned as CEO. 23andMe didn’t say whether or not there are different bidders. It can proceed to function throughout the sale course of, having secured $35 million in financing over the weekend.
Officers, together with California Lawyer Basic Rob Bonta, had questioned what would occur to the genetic knowledge collected by 23andMe, although the corporate’s privateness insurance policies say that the information might be bought to different corporations. The corporate mentioned the chapter course of won’t have an effect on the way it shops, manages or protects buyer knowledge.
23andMe garnered numerous consideration from traders when it was first taken public by way of a special-purpose acquisition car (SPAC) run by billionaire Richard Branson at a $3.5 billion valuation in 2021. Its market worth peaked later that yr at almost $6 billion as a consequence of booming curiosity in DNA testing kits however demand has waned since, hurting 23andMe and its Blackstone-owned rival AncestryDNA.
Gross sales of the buyer kits regularly picked up throughout the vacation season, however 23andMe has struggled to retain clients primarily as a result of individuals would use the kits as soon as and see little motive to order one other one. Bernstein analysts have mentioned that the marketplace for ancestry testing kits could be near tapped out.
In 2023, hackers uncovered the non-public knowledge of almost 7 million 23andMe clients over a five-month interval, dealing a serious blow to the corporate’s status and compounding its progress issues. The breach raised alarm amongst clients involved about their privateness and the way DNA-testing corporations deal with their knowledge.
23andMe ultimately agreed late final yr to a $30 million settlement in a lawsuit associated to the breach.
The San Francisco-based agency has additionally laid off 200 staff and stopped the event of all therapies as half of what’s going to be a serious overhaul.
Wojcicki has been pushing for a buyout since final April, however has been rebuffed by 23andMe’s board. She reportedly used her contacts, together with ex-husband and Google co-founder Sergey Brin, to assist drive preliminary investments. She can be changed by Chief Monetary Officer Joe Selsavage on an interim foundation.
Wojcicki mentioned, in a publish on X on Monday, that she intends to make one other bid, with out giving particulars. Her final provide of 41 cents per share valued 23andMe at about $11 million.
Story Continues
