23andMe files for bankruptcy as CEO steps down

Genetic testing company 23andMe has filed for Chapter 11 bankruptcy protection amid decreased sales. Co-founder and CEO Anne Wojcicki also resigned from her position.

The company said on Monday it intends to continue regular operations during the bankruptcy process, which includes maintaining customer access to services and fulfilling orders without interruption.

CEO and co-founder Anne Wojcicki, who stepped down as part of the announcement, will remain on the board of directors and has indicated interest in participating in the asset sale, according to the Associated Press.

In a message to customers, 23andMe said that the bankruptcy filing does not change how it manages or protects user data. “Any buyer of 23andMe will be required to comply with applicable law with respect to the treatment of customer data,” the company said.

The restructuring is being carried out under Section 363 of the U.S. Bankruptcy Code, which allows companies to sell assets through a court-supervised auction process. If multiple qualified offers are received, the company will select the best bid based on value and alignment with its mission.

The bankruptcy follows a security breach in late 2023 that exposed personal information of nearly 7 million users. The breach prompted class-action lawsuits and regulatory scrutiny.

In the months that followed, 23andMe laid off approximately 40% of its workforce and saw the resignation of all independent directors from its board. The company, which went public in 2021 through a SPAC merger that valued it at $3.5 billion, has since seen its market capitalization drop significantly.

Additionally, privacy concerns have emerged due to the company’s partnerships with more than 30 pharmaceutical and biotech firms, which have been granted access to its genetic database, according to Reuters.

Founded in 2006, 23andMe was an early leader in direct-to-consumer genetic testing and claims to have served over 15 million customers globally.

“Through this process, we will seek to find a partner who shares our commitment to customer data privacy and allows our mission of helping people access, understand and benefit from the human genome to live on,” the company said.

23andMe has launched a dedicated website to provide updates on the restructuring process. It is unclear how long the sale process will take or whether the company will be sold in full or in parts.