Genetic testing company 23andMe has filed for Chapter 11 bankruptcy protection, marking a dramatic downturn for the once-high-flying personal genomics firm. The company, co-founded by CEO Anne Wojcicki, announced the move late Sunday while also revealing that it is exploring a potential sale.
Financial Troubles and Restructuring
The filing, submitted in a New Jersey bankruptcy court, comes after months of financial strain. 23andMe has struggled with declining demand for its DNA testing kits, increased competition, and a failed pivot to drug development. The company listed both assets and liabilities between $500 million and $1 billion, according to court documents.
As part of the restructuring, 23andMe has secured commitments for $50 million in financing from existing investors to continue operations during the bankruptcy process. The funds will help maintain services for customers while the company seeks a buyer or restructuring deal.
Leadership Changes
Alongside the bankruptcy announcement, Anne Wojcicki is stepping down as CEO, though she will remain involved in an advisory role. The company has not yet named a permanent successor but stated that an interim leadership team will oversee operations during the transition.
What Went Wrong?
23andMe rose to fame in the late 2010s as a pioneer in direct-to-consumer genetic testing, offering insights into ancestry and health risks. However, growth slowed as the market became saturated, and privacy concerns deterred some potential customers.
The company attempted to shift toward drug discovery, using its vast genetic database to develop new therapies. However, these efforts failed to generate significant revenue, and earlier layoffs (including a 15% workforce cut in 2023) were not enough to stabilize finances.
What’s Next?
23andMe plans to continue operating while searching for a buyer. Potential suitors could include larger biotech firms, pharmaceutical companies, or private equity investors interested in its genetic database.
For now, the company assures customers that their DNA data remains secure and that existing services will remain available. However, the bankruptcy filing raises questions about the long-term viability of consumer genetic testing businesses in a tightening market.
