23andme Files for Bankruptcy but Founder Might Still Save the Company
The genetic testing company, 23andme, has filed for bankruptcy protection; and its customers are now racing to delete their personal data from the company’s databases.
In a statement, the company says that it has started this process “to facilitate a sale process to maximize the value of its business”. It adds: “The Company intends to continue operating its business in the ordinary course throughout the sale process.”
Mark Jensen, Chair and member of the Special Committee of the Board of Directors said: “We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities.
“We believe in the value of our people and our assets and hope that this process allows our mission of helping people access, understand and benefit from the human genome to live on for the benefit of customers and patients,” he added.
The news has prompted customers to rush to delete their data, which includes genetic information, health histories, and ancestry details. Customers then started reporting IT problems as the company’s systems groaned under the weight of requests. In its statement, 23and me adds that the bankruptcy has not changed “…the way the Company stores, manages, or protects customer data.”
The company was launched in 2006 by Anne Wojcicki – the sister of departing YouTube CEO, Susan Wojcicki and former wife of Google cofounder Sergey Brin. Although pioneering the company fell into problems when the Food and Drug Administration in the US sent 23andMe a warning letter stating that its spit collection vial was "an unapproved medical device". The FDA also placed limits on genetic testing for consumers.
Then in 2023, the company was hit by a huge data breach and millions of 23andMe customer accounts were compromised. The company was hit with a $30 million settlement.
However, Wojcicki – who has now been forced to step down as CEO, continues to battle for the future of the company. “Her latest offer valued 23andMe at $11m, below its current market value of just under $48m, and a long way from its $5.8bn peak in February 2021 after its stock market float on the Nasdaq exchange” writes The Guardian. However, with customers terrified about their data and rushing to close their accounts, the company’s reputation is in tatters.
