23andMe, a pioneering genetic testing company, has filed for bankruptcy after struggling with declining sales and a major data breach.
The company, known for offering DNA tests that reveal ancestry and health-related traits, filed for bankruptcy in Missouri on Sunday. Founded in 2006, 23andMe became a major player in the DNA testing industry, with millions of customers eager to learn about their genetic backgrounds. However, after peaking in popularity, the demand for genetic testing has waned in recent years, contributing to the company’s financial troubles.
At its height, 23andMe saw millions of people purchasing its mail-back saliva tests, often as holiday gifts. The Silicon Valley-based company went public in 2021 and had 15 million customers. Despite this, it faced challenges as the DNA testing trend declined. Additionally, the company’s recent data breach significantly damaged its reputation. In 2023, hackers gained access to 6.9 million user accounts, exposing sensitive information, including names, birth years, and genetic data. The breach affected millions, particularly those with genetic matches stored on the site.
To address its financial issues, 23andMe laid off 40% of its workforce, around 200 employees, and suspended its research programs. In a regulatory filing, the company disclosed that it had agreed to pay $37.5 million to settle claims stemming from the data breach. The breach raised concerns about the security of users’ personal information, with experts warning that it could be misused by future buyers if the company is sold.
23andMe's co-founder and former CEO, Anne Wojcicki, resigned from her position but remains on the board of directors. Wojcicki also made an unsuccessful bid to purchase the company and expressed her ongoing belief in its future despite the challenges. The company’s share price dropped nearly 50% on Monday, falling to 92 cents.
Tech columnist Geoffrey Fowler from the Washington Post advised customers to delete their data, citing risks that the company’s information might be sold or used by new owners for unknown purposes.
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