23andMe Is Sinking Fast. Can the Company Survive?
23andMe is in trouble. Once a hot Silicon Valley startup, the genetic testing company has been in free fall since a major data breach last year that affected roughly half of its customers. The incident led to a class action lawsuit, which the company has agreed to settle for $30 million.
In August, the company shuttered its in-house drug discovery unit. And last month, all of the company’s board of directors resigned en masse over cofounder and CEO Anne Wojcicki’s “strategic direction,” which included a proposal to take the company private at 40 cents per share. Wojcicki had said she would consider third-party takeover offers but reversed course in a regulatory filing this week.
Valued at $6 billion when it went public in 2021, 23andMe’s stock has plummeted from $10 a share three years ago. The company has yet to turn a profit in the 18 years since its founding. Now, it faces an uncertain future as it struggles to make money and remain relevant.
One thing seems clear: Home DNA testing has lost its luster. 23andMe kits just aren’t as popular as they used to be. Declining sales are in part to blame for the company’s slump in revenue, which was $40 million in the first quarter of this year, a 34 percent decrease over the same period in the prior year. Test sales started dropping off back in 2019, a trend Wojcicki previously told WIRED was due to increased competition in the space. That year, rival DNA-testing company Ancestry rolled out its own health testing service, AncestryHealth. It discontinued the service less than two years later.
