Genetic testing company 23andMe has filed for Chapter 11 bankruptcy in the United States, citing prolonged revenue challenges and reputational fallout from a 2023 data breach. The California-based firm, once valued at nearly $6 billion, is seeking a buyer while continuing its operations during the court-supervised process.
The bankruptcy filing, submitted March 24, follows years of declining demand for the company’s ancestry and health-related DNA testing kits. Though initially popular, the appeal of one-time consumer genetic testing has dwindled, leaving companies like 23andMe and its competitor AncestryDNA struggling to retain customers.
Co-founder Anne Wojcicki stepped down as CEO shortly before the filing. Wojcicki, who previously made several unsuccessful bids to take the company private, indicated via social media that she plans to submit another offer. The board rejected her most recent bid, which valued the company at about $11 million.
The company has secured up to $35 million in financing to maintain operations during the bankruptcy proceedings. Chief Financial Officer Joe Selsavage will serve as interim CEO during the transition.
The 2023 data breach, which exposed sensitive information of approximately 7 million users over a five-month span, added further complications. Although 23andMe maintains that it anonymizes genetic data shared with research partners, the breach raised questions about how personal and genetic information is handled and protected.
California Attorney General Rob Bonta recently urged consumers to delete their genetic data and revoke permissions granted to the company. In an online FAQ, 23andMe said that any future buyer must comply with relevant laws regarding data protection. However, experts point out that federal laws such as HIPAA do not apply to direct-to-consumer genetic testing companies.
Legal scholars and privacy advocates warn that the safeguards around genetic data are limited. The Genetic Information Nondiscrimination Act (GINA) prevents discrimination by employers and insurers based on genetic data, but does not regulate commercial usage by private firms. Some states have enacted their own policies, offering customers more control over how their data is used and shared.
Over the years, 23andMe has entered into multiple deals with pharmaceutical and biotech firms, including a high-profile partnership with British drugmaker GSK. These agreements allow researchers to analyze anonymized genetic data to support drug development, but most of the arrangements have not been publicly disclosed.
The company’s bankruptcy announcement came with assurances that users may still access their genetic reports, purchase testing kits, and delete their data. Customers who purchased kits before March 23 can still request refunds within 30 days, while newer orders are eligible for refund within 24 hours.
The Chapter 11 filing also pauses ongoing litigation, including class-action lawsuits related to the data breach. 23andMe has set up a dedicated restructuring website and customer support team to help users navigate the process.
While the company’s long-term future remains uncertain, 23andMe said it is searching for a buyer aligned with its values and mission. For many customers, the broader concern remains the security and future use of their personal genetic information.
Image is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license and was created by John Murphy.
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