23andMe files for bankruptcy protection

DNA testing company 23andMe has filed for bankruptcy protection, leading to the immediate resignation of its co-founder and CEO, Anne Wojcicki.

In a press release, 23andMe assured customers that there would be “no changes to the way the company stores, manages, or protects customer data” during the sale. However, the Attorney General of California issued a consumer alert advising users to delete their data from the platform, citing the company’s reported financial struggles.

Once valued at as much as USD 6 billion, 23andMe gained popularity with its saliva-based test kits but has faced significant challenges in recent years. Founded in 2006 and going public in 2021, the company has never turned a profit.

In September, it settled a lawsuit that claimed it failed to protect the privacy of nearly seven million customers after a data breach in 2023. Hackers accessed personal information, including family trees, birth years, and geographic locations, but the stolen data did not include DNA records.

Following the breach, 23andMe laid off 200 employees, representing 40 percent of its workforce. Joe Selsavage, the company's finance chief, will step in as interim CEO, while Wojcicki remains on the board. She had previously attempted to take the company private but was resistant to offers from third parties.

Despite endorsements from celebrities like Oprah Winfrey, Eva Longoria, and Snoop Dogg, 23andMe struggled to adapt its business model. Customers were left wanting more after paying for DNA reports, and an attempt to introduce a subscription service was unsuccessful. Efforts to leverage its extensive data for drug development also fell short.

Last summer, all of the company’s directors, except Wojcicki, resigned, citing dissatisfaction with buyout offers.

In a statement, 23andMe's board chair, Mark Jensen, reiterated the company’s commitment to safeguarding customer data and ensuring transparency in data management during any potential transaction. However, concerns remain among users about the future of their genetic data.

In the UK, DNA information is classified as special category data under data protection laws, providing legal protections in the event of bankruptcy or changes in ownership.

Prof. Carissa Veliz, author of Privacy is Power, previously highlighted the value of genetic data, stating, “If you gave your data to 23andMe, you also gave the genetic data of your parents, your siblings, your children, and even distant kin who did not consent to that.”