What went wrong for 23andMe

Despite operating for nearly two decades without turning a profit, 23andMe went public in 2021 and reached a $6 billion valuation. The stock price collapsed more recently, leaving the company with a market value of less than $50 million.

In July 2024 Wojcicki, the CEO and cofounder, proposed taking 23andMe private, but a special board committee rejected the proposal five days later.

The special committee said it would review a revised proposal, but a September letter indicated that members had not received a "fully financed, fully diligence, actionable proposal."

Privacy concerns have dogged 23andMe for years, but in 2023, those fears became a reality for users when their data was compromised. That October, hackers said they accessed certain users' names, birth details, ethnicities, and photos.

23andMe confirmed in December that data for almost 7 million users was accessed. A data breach notification filed in January 2024 said it took the company five months to realize hackers had accessed the data.

Affected users filed a class-action lawsuit against 23andMe this March, which led to the company agreeing to pay the $30 million settlement in September 2024.

One week after the company agreed to settle the class-action lawsuit, all seven independent directors on 23andMe's board resigned. In a letter to Wojcicki, they said they differed on its strategic direction.

The resignations sparked further media coverage of 23andMe, which appointed three new independent directors to its board in October 2024.

Some consumers grew concerned in September 2024 when an SEC filing said Wojcicki would be open to considering takeover proposals.

She walked back her comments in a separate filing.

A 23andMe spokesperson told BI at the time that Wojcicki wanted to take the company private, and was not open to a takeover.

23andMe cut some 200 jobs in November 2024 to "substantially reduce operating expenses" and save more than $35 million annually, it said in a press release.

It also ended its therapeutics programs and would "wind down" ongoing clinical trials.

23andMe's second-quarter financial results in November revealed a 12% fall in revenue to $44 million, while operating expenses fell 17% to $84 million.

In a November 2024 SEC filing, 23andMe said it would need additional liquidity to stay afloat. At the time it had a deficit of $2.3 billion and and cash and cash equivalents of just $126.6 million.

23andMe told BI in January it had privacy protection for customers, and did not share data with third parties without consent. Customers can opt into its Research program, but it requires them to consent before joining.

"Roughly 80% of 23andMe customers consent to participate in our research program, which has generated more than 270 peer-reviewed publications uncovering hundreds of new genetic insights into disease," a spokesperson said.

"We are committed to protecting customer data and are consistently focused on maintaining the privacy of our customers. That will not change."

23andMe said on Sunday it had filed for Chapter 11 bankruptcy protection, with cofounder Wojcicki stepping down as CEO immediately.

The firm said it started the voluntary proceedings in the US Bankruptcy Court for the Eastern District of Missouri.

The company would continue operating while a buyer was sought to "maximize the value of the business" and cut costs, chairman Mark Jensen said.

Joe Selsavage, the chief financial officer, has become interim CEO.