Once a $6 Billion Giant, 23andMe Collapses Into Bankruptcy

23andMe’s fall from a $6 billion valuation to bankruptcy reveals the challenges of the DNA testing industry, privacy concerns, and a shifting market landscape.

Editorial Team (ET)May 8, 2025

Once a leader in consumer DNA testing, 23andMe has filed for bankruptcy in the United States. The company, which was valued at nearly $6 billion in 2021, has struggled in recent years as demand for its ancestry testing kits declined and a major data breach damaged its reputation.

From Market Darling to Financial Ruin

Founded by Anne Wojcicki, 23andMe was a pioneer in the genetic testing industry, promising consumers a window into their ancestry and health through a simple at-home test. The company gained widespread attention, even making it onto Oprah Winfrey’s coveted list of favorite things. At its peak, 23andMe enjoyed booming sales, particularly during holiday seasons when consumers purchased kits as gifts. However, demand has since plummeted, leaving the company in financial distress.

The decline is attributed to several factors. Unlike subscription-based services that ensure recurring revenue, DNA testing is often a one-time purchase. Most customers use the kits once and see little reason to buy another. Analysts have warned for years that the market was reaching a saturation point, particularly in high-income segments that could afford such discretionary spending.

The Data Breach That Shattered Consumer Trust

In 2023, 23andMe suffered a catastrophic data breach that exposed the personal information of nearly 7 million customers. The breach raised alarms about privacy and security, reinforcing concerns about how genetic testing firms handle sensitive data. Consumers who once viewed DNA testing as a fascinating tool for self-discovery began to reconsider the risks associated with sharing their genetic information.

The fallout was swift. Legal troubles followed, with the company eventually agreeing to a $30 million settlement to resolve lawsuits related to the breach. Meanwhile, consumer confidence in the brand plummeted, further crippling sales.

Leadership Shakeup and Restructuring Efforts

Anne Wojcicki made multiple unsuccessful attempts to buy out the company, seeking to take it private in an effort to stabilize operations. However, 23andMe’s board rebuffed her proposals. Following these failed attempts, Wojcicki resigned as CEO, and Chief Financial Officer Joe Selsavage stepped in as interim leader.

The company has taken drastic measures to stay afloat, laying off 200 employees and halting development of all therapeutic products. It also secured $35 million in financing to continue operating during the bankruptcy process. While Wojcicki has expressed interest in making another bid for the company, it remains unclear whether other buyers are in the picture.

A Cautionary Tale for the DNA Testing Industry

23andMe’s downfall signals broader challenges for the DNA testing market. Rivals such as AncestryDNA, now owned by Blackstone, have faced similar struggles as consumer interest wanes. Analysts have pointed out that the market is limited, catering primarily to individuals willing to pay out-of-pocket for ancestry insights. The once-booming industry may have reached its natural peak.

In 2021, billionaire Richard Branson’s special purpose acquisition company (SPAC) took 23andMe public at a valuation of $3.5 billion. Just a few years later, the company’s estimated worth has collapsed to a mere fraction of that amount.

As 23andMe navigates bankruptcy proceedings, the industry watches closely. The fate of the company could offer valuable lessons on sustainability, consumer trust, and the future of personalized genetics.

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