Genetic testing company 23AndME filed for bankruptcy protection on Sunday after raising concerns over months of uncertainty about its business model and the security of the horde of customer data it holds.
In a statement, 23Andme said it would file Chapter 11 bankruptcy to further reduce costs to “facilitate the sales process and maximize the value of the business.” 23andMe CEO Anne Wojcicki has announced that she has stepped down to bid for the company.
23AndMe plans to continue operations during the sales process and will not change how it stores, manages and protects customer data, the statement said.
Wojcicki, the company's co-founder, which owned 49% of its voting stock, said on Sunday that he was disappointed that the company had rejected an earlier bid to make it private.
“I have stepped down as CEO of the company, so I can be in the best position to pursue the company as an independent bidder,” she said in a social media statement, thanking her for saying she is the company's 15 million customers. These customers usually provide the company with saliva samples for analysis to learn more about their ancestors, family characteristics and potential health risks.
After 23Andme was released in 2021, its market value temporarily exceeded $6 billion. However, it was traded for less than $50 million last week before filing for bankruptcy. In the first nine months of the fiscal year, the company reported a 7% decline in revenue and a loss of $174 million.
Part of the decline in revenue was attributed to a decrease in test kits ordered. It came after a data breach in 2023. There, hackers appeared to target Jews and Chinese customers, gaining access to personal information from a profile of nearly 7 million people.
The class action lawsuit subsequently accused the company of failing to notify those customers that it was targeted. In a statement at the time, the company said it was taking steps to further protect its customer data.
In September, seven independent directors of the company's board resigned, citing their complaints in that direction.
