By Bhanvi Satija, Anusha Shah and Surbhi Misra
(Reuters) -23andMe on Sunday filed for chapter within the U.S. after battling weak demand for its ancestry testing kits and a 2023 knowledge breach that broken its repute.
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’ll proceed to function in the course of the sale course of, having secured $35 million in financing over the weekend.
Officers, together with California Legal professional Common 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 could possibly be bought to different companies. The corporate stated the chapter course of won’t have an effect on the way it shops, manages or protects buyer knowledge.
23andMe garnered a lot of consideration from buyers when it was first taken public by way of a special-purpose acquisition automobile (SPAC) run by billionaire Richard Branson at a $3.5 billion valuation in 2021. Its market worth peaked later that 12 months at practically $6 billion resulting from booming curiosity in DNA testing kits however demand has waned since, hurting 23andMe and its Blackstone-owned rival AncestryDNA.
Gross sales of the patron kits continuously picked up in the course of the vacation season, however 23andMe has struggled to retain prospects 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 stated that the marketplace for ancestry testing kits may be near tapped out.
In 2023, hackers uncovered the non-public knowledge of practically 7 million 23andMe prospects over a five-month interval, dealing a serious blow to the corporate’s repute and compounding its progress issues. The breach raised alarm amongst prospects involved about their privateness and the way DNA-testing companies deal with their knowledge.
23andMe ultimately agreed late final 12 months 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 will likely be changed by Chief Monetary Officer Joe Selsavage on an interim foundation.
Wojcicki stated, 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.