DNA Testing Giant 23andMe Files for Bankruptcy Protection, CEO Steps Down

San Francisco – Genetic testing company 23andMe has filed for bankruptcy protection as it struggles with mounting financial challenges. The company also announced that co-founder and CEO Anne Wojcicki has resigned with immediate effect, marking a significant leadership shake-up.

The embattled firm will now seek a buyer under court supervision while continuing operations. In a press release, 23andMe assured customers that its data storage and privacy policies remain unchanged despite the ongoing financial turmoil.

Regulators Warn Customers Amid Financial Crisis

The bankruptcy filing follows a warning from the Attorney General of California, who advised customers to consider deleting their data due to the company’s “reported financial distress.”

Founded in 2006, 23andMe once revolutionized consumer DNA testing with its saliva-based genetic kits, attracting high-profile endorsements from Oprah Winfrey, Eva Longoria, and Snoop Dogg. At its peak, the company was valued at $6 billion (£4.6 billion). However, it has never turned a profit since going public in 2021 and has struggled to sustain its business model.

Security Breaches and Business Model Struggles

In 2023, a major data breach exposed the personal information of nearly seven million customers. Although the company claimed that DNA records were not compromised, hackers gained access to family trees, birth years, and geographic locations by exploiting old passwords. The breach led to a lawsuit, which 23andMe settled in September.

Following the settlement, the company laid off 200 employees—about 40% of its workforce—in an attempt to cut costs.

Leadership Transition and Uncertain Future

With Wojcicki’s departure, the company’s Chief Financial Officer, Joe Selsavage, will step in as interim CEO. Wojcicki will remain on the board, though her past reluctance to accept third-party buyout offers raises questions about the company’s future direction.

23andMe has struggled to retain customers, as its core business relies on one-time DNA reports with little incentive for repeat purchases. A subscription service failed to gain traction, and efforts to pivot into drug development using its vast genetic database also faltered.

Privacy Concerns Loom Large

The bankruptcy filing raises concerns about the fate of the company’s vast DNA database. 23andMe board chair Mark Jensen stated that safeguarding customer data remains a priority and will be a key factor in any potential sale.

However, privacy experts warn that genetic information is among the most sensitive personal data, as it contains insights not only about individuals but also their family members.

In the UK, DNA data is classified as "special category data" under privacy laws, providing some legal protections if a company goes bankrupt or changes hands. However, past cases, such as the apparent shutdown of genetic testing firm Atlas Biomed, have left customers uncertain about the long-term security of their genetic information.

As 23andMe navigates its financial crisis, the future of its customers' genetic data—and the company's place in the industry—remains uncertain.