Once a trailblazer in consumer genetics, 23andMe has filed for Chapter 11 bankruptcy—a dramatic fall for a company once valued at $6 billion. From its peak in 2021 to its current penny-stock status, the company’s decline highlights the challenges of turning genetic testing into a sustainable business.
Here’s what led to its downfall—and what comes next.
1. A Promising Start That Couldn’t Last
Founded in 2006 by Anne Wojcicki, Linda Avey, and Paul Cusenza, 23andMe aimed to democratize genetic testing, offering consumers insights into ancestry and health risks.
- Anne Wojcicki, a Yale biology graduate and former healthcare investor, led the company as CEO until her resignation in March 2025.
- Linda Avey, a genomics expert, left in 2009 to pursue other ventures.
- Paul Cusenza, an MBA graduate, helped shape early business strategy.
Despite raising over $1 billion from investors like Google Ventures and Sequoia Capital, 23andMe never turned a profit. Like DeCode Genetics (which collapsed in 2009), it struggled to make the “pure genomics” model work long-term.
2. Plummeting Valuation and Financial Collapse
23andMe went public in 2021 via a SPAC merger, reaching a 3.5billionvaluation.Butby2025,itsmarketcapcrashedbelow300 million.
Key Financial Struggles:
- $285 million net loss in 2024
- Debt exceeding $500 million
- Failed privatization bid by Wojcicki (40 cents/share rejected by the board)
- 40% workforce cuts in late 2024
The company’s core problem? Reliance on one-time DNA kit sales without creating lasting customer value.
3. Strategic Missteps and Failed Pivots
A. The Ill-Fated Pharma Play
In 2018, 23andMe partnered with GSK to monetize its genetic database for drug discovery. Despite early hype, the deal failed to produce blockbuster drugs, leaving the company without a reliable revenue stream.
B. Declining Consumer Demand
After an initial boom, DNA test sales dropped over 50% by 2023. Why?
- Market saturation – Most interested customers had already tested.
- Privacy fears – A 2023 data breach exposed 6.9 million users’ information, leading to a $30 million lawsuit settlement and eroding trust.
C. Losing the Competition War
Rivals like AncestryDNA and MyHeritage dominated genealogy, while newer players (Helix, Nebula Genomics, Tempus) offered AI-driven health insights. 23andMe couldn’t keep up.
What’s Next for 23andMe?
With Wojcicki stepping down and the company in bankruptcy, three possible paths remain:
- Restructuring & Sale – Could a biotech firm acquire its genetic database?
- Wojcicki’s Return – She may still bid to take the company private.
- Liquidation – If no buyer emerges, user data could be at risk.
For now, 23andMe assures customers their data remains accessible—but California officials urge users to delete their profiles as a precaution.
A Cautionary Tale for the Genomics Industry
23andMe’s collapse underscores the difficulty of building a profitable business around consumer DNA testing. Without recurring revenue, strong privacy protections, or a clear healthcare pivot, even a pioneering company can falter.
