23andMe Files For Bankruptcy, Customers Urged to Delete Data
A Strategic Move Amid Struggles
23andMe, the once-celebrated genetic testing company, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Missouri. This filing aims to facilitate a court-supervised sale process to maximize the value of its business, following years of financial challenges and a failure to achieve profitability since its founding in 2006.
Leadership Shakeup and Financial Details
Co-founder and CEO Anne Wojcicki resigned effective immediately, though she remains on the board and plans to bid for the company independently. Joseph Selsavage, the Chief Financial and Accounting Officer, has stepped in as interim CEO.
The company reported assets and liabilities each ranging between $100 million and $500 million, with a $35 million debtor-in-possession financing commitment from JMB Capital Partners to sustain operations during the process.
Operational Continuity and Data Privacy
23andMe has assured customers it will continue normal operations, including selling DNA kits and providing access to genetic reports.
The company emphasized that there are “no changes” to how it stores, manages, or protects customer data, a critical point given its database of over 15 million users.
Any potential buyer will be required to comply with applicable privacy laws, though concerns linger about the future of this sensitive genetic information post-sale.
A Rocky Road to Bankruptcy : 23andme Bankruptcies Data
The filing caps a turbulent period marked by a 2023 data breach exposing 6.9 million customers’ information, a $30 million lawsuit settlement, and a 40% workforce reduction in November 2024.
After going public in 2021 with a peak valuation of $6 billion, 23andMe’s stock has plummeted over 99%, trading at 79 cents before the announcement.
Declining kit sales and an inability to pivot to a sustainable subscription model have compounded its woes.
Uncertain Future and Customer Action
If approved, the bankruptcy court will oversee a 45-day bidding process, potentially leading to an auction of 23andMe’s assets.
Privacy experts and officials, including California Attorney General Rob Bonta, have urged users to delete their data, citing risks if it’s sold to a new entity with different policies.
While 23andMe vows transparency, the fate of its vast genetic repository remains a focal point as this Silicon Valley pioneer navigates its next chapter.
