It was once the go to present for a relative or friend who had everything except proof that they are descended from Vikings, and as recently as 2021 it was valued at $6 billion, but now Silicon Valley genetic testing company 23andMe has filed for bankruptcy protection meaning it will be under the control of the courts while it seeks a new owner. Meanwhile joint founder and CEO Anne Wojcicki has stood down from the role, although she remains on the Board.
At the time of writing the basic ancestry service is still on offer in the UK for £89 with a combination of Ancestry and Health reports for £119 discounted from £159 with annual membership available for the same price discounted from £218, but, alongside debts and liabilities, reported by the company as being between $100m and $500m, commentators point out that there is a basic flaw in the business model adopted by 23andMe. That is someone really only needs to take a genetic test once, certainly if the object is to receive a steer as to where your family may have originated and 23andMe did not go down the route adopted by other companies such as AncestryDNA of trying to retain clients by adding access to ancestry databases such as birth, marriage and death records and military service records enabling clients to fill out their family story. A decision which probably cost the company market share, in spite of some reviews suggesting that the ancestry reporting of 23and Me was more comprehensive than other market leaders in the field.
Instead the company chose to work primarily in the field of medical applications with the idea of empowering users, but with the real value being in the massive database of individuals who had answered of questions about their personal history as they allowed their personal genome to be recorded.
By 2017 the science journal Nature recorded that 23andMe was responsible for at least 80 publications, and had signed more than 20 partnerships with pharmaceutical firms. The company had even launched its own therapeutics division.
As a measure of the scale of what the company was attempting the same article in Nature quoted Stanford University cardiologist Euan Ashley as stating,
“They have quietly become the largest genetic study the world has ever known,”
However, by the time 23andMe filed for chapter 11 bankruptcy in March 2025, the company had been overtaken by the size of the database held by rival Ancestry DNA.
There has also been criticism of the California based company.
For example DNA researchers in archaeology pointed to the relative lack of a database for people of African ancestry as opposed to, for example, those with a European background, although the company did take steps to rectify the gap undertaking a specific project to recruit members with a background from sub-Saharan Africa and adding 120 new regions it claimed to be able to identify to its global genetic map in 2018.
Alongside these general concerns the company also faced another critical failure, which undermined confidence among users and potential users at the most fundamental level.
In 2023 23andMe was the victim of a massive data breach, with the records of some seven millions users, around half of 23andMe’s client base at the time, being stolen.
Settling a lawsuit resulting from the data breach alone cost the company $23m at a time when statistics suggest the home DNA test bubble, if not having burst, was at least deflating.
To make matters worse, on 24 March the UK Information Commissioner notified the company of its intention to fine the company £4.59m under UK data protection Law for the same data breach.
Another complication throughout the company’s nineteen year history has been its interaction with a complex and evolving regulatory system across multiple state and national jurisdictions.
Most seriously, in 2013 the company had a run in with the US Food and Drug Administration over whether offering clients information about health risks was a medical procedure and therefore subject to federal regulation.
The company was finally forced to admit that it was subject to regulation, with Wojcicki conceding in a manner which now seems strangely prescient given Elon Musk’s attempt to bring a Silicon-Valley approach to the federal government,
“You just accept at some point, you’re regulated, and there’s no Silicon-Valley, 24-hour, easy fix.”
With the uncertainty over the future ownership of the company and its huge reservoir of data, the thoughts of privacy and data security regarding some of the most intimate information anyone can place in the hands of an outside body are front and centre for 23andMe’s clients, regulators and privacy campaigners.
Just days before the company filed for Chapter 11 California Attorney General Rob Bonta published advice to Californians to delete their 23andMe accounts, and added detailed instructions on how to do it, while Anya Prince, a professor of law at the University of Iowa, told Reuters,
“How the data is used is really the privacy policy that anybody who has used 23andMe clicks through and then accepts. But as we know, most people don’t read the privacy policies,”
Prince added the important caution that even deleting an account was not a guarantee that any risk was eliminated, nonetheless,
“Once that data is out there,” she said, ” then, even if you requested your account to be deleted, they can’t find your information because it no longer has your name attached. So for most people that might be fine as long as their names (are) not
attached.”
Taking to eX-Twitter in the wake of the Chapter 11 filing former CEO Wojcicki said she was stepping down “so I can be in the best position to pursue the company as an independent bidder”.
She added: “If I am fortunate enough to secure the company’s assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics.”
However, with the value of the company lying essentially in its intellectual property, principally its database of individual genomes, the more of those clients who deactivate their accounts and remove their data, the lower that value could be to a potential buyer, while certainly as far as the ancestry element of the 23andMe service is concerned demand may have peaked.
After all, you can only find 4% of your DNA is Neanderthal once.
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