23andMe, one of the world’s largest DNA testing companies, announced yesterday that it is filing for bankruptcy protection.
The company said it has initiated voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Eastern District of Missouri.
A Chapter 11 bankruptcy enables a struggling company to reorganise its debts while remaining open for business, in the hopes of either becoming solvent or finding a suitable buyer.
If approved by the court, 23andMe will seek to sell all of its assets over a 45-day process.
The company said that it would continue to operate its business and there would be no changes to the way it stores customer data.
Mark Jensen, chair and member of the Special Committee of the Board of Directors at 23andMe, said: “After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business.
“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.”
“We want to thank our employees for their dedication to 23andMe’s mission. We are committed to supporting them as we move through the process. In addition, we are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction.”
Founded in 2006, 23andMe has seen its share price plummet since it went public in February 2021, from $17.65 to $1.82 as of the latest reports.
The company also suffered a major data breach in October 2023, when hackers breached about 14,000 customers’ accounts, gaining access to the data of 6.9 million people who were listed as those users’ relations.
In September 2024, 23andMe agreed to pay $30 million to settle a lawsuit by affected customers.
The company said that it would use the bankruptcy protection proceedings to resolve all outstanding legal liabilities from the breach.
In September 2024, all independent directors at the company apart from the CEO and founder Anne Wojcicki resigned.
The bankruptcy protection proceedings come as 23andMe rejected a takeover bid by Wojcicki, who is now stepping down as CEO. She will be temporarily replaced by Joe Selsavage, the company’s chief financial and accounting officer.
23andMe has an FAQ section about the ongoing situation on its website.
For guidance on how to download or delete your data from 23andMe, please see the guide on the Who Do You Think You Are? Magazine website.
