The collapse of the $6 billion giant, once considered 'bigger than Google'.

From a company valued at $6 billion, 23andMe, a provider of in-home DNA testing services, filed for bankruptcy last weekend.

Anne Wojcicki built the 'giant' 23andMe but also caused its dramatic decline - Photo: AFP

Before filing for bankruptcy, 23andMe had been on a downward spiral for a long time, burning through more than $1 billion and laying off more than half of its workforce. The board of directors resigned en masse in September due to disagreements with the company's management strategy led by co-founder and CEO Anne Wojcicki.

The giant

According to the Wall Street Journal , Wojcicki is not ready to let go, stating she will seek to buy back the company.

Wojcicki's optimistic spirit and belief that "it can be done" helped her build her company, bringing DNA testing services to millions of people's homes. However, that same spirit also drove her to pursue costly strategies to exploit 23andMe's data repository for drug development and healthcare services, which ultimately failed.

Now, the advantage is no longer with Ms. Wojcicki. In the bankruptcy proceedings, her ownership of the super-voting shares was eliminated. Her previous offers to buy the company were repeatedly rejected.

"Improving healthcare is incredibly challenging. 23andMe pioneered a completely different approach, directly empowering individuals to access crucial information about themselves, helping them think about their genetic identity and personalized preventative care in a completely new way," said Wojcicki.

Wojcicki grew up in Silicon Valley and is the daughter of a former head of the physics department at Stanford University. After graduating from college, she worked at financial firms, specializing in analyzing businesses in the healthcare sector. Later, she co-founded the genetics startup 23andMe with Linda Avey.

Initially, 23andMe struggled to attract attention to its testing, with the service costing as much as $399 in 2008. To gain traction, the company organized "spit parties" at high-profile events like New York Fashion Week or the World Economic Forum in Davos, where celebrities spat into 23andMe's test tubes to provide DNA samples.

Later, 23andMe's service price dropped to just $99, making it more accessible. Stories of customers unexpectedly finding long-lost siblings or biological parents propelled 23andMe to social media fame.

Downhill

After going public in 2021, the company was at one point valued at over $6 billion, and CEO Wojcicki once joked that it was "bigger than Google." However, they still struggled to generate consistent revenue.

The challenge for 23andMe since its inception is that customers typically only need to have a DNA test done once in their lifetime, meaning they only pay once.

Therefore, Wojcicki began looking for new ways to profit from the company's massive genetic data repository. She raised additional funds and invested in new drug development to create breakthrough pharmaceuticals. However, this was extremely risky, as bringing a new drug to market can take years and cost hundreds of millions of dollars.

Wojcicki then spent $400 million to acquire the telehealth company Lemonaid Health, hoping to use genetic reports to better support patient care. This plan also failed, and Lemonaid's revenue halved.

In 2020, Ms. Wojcicki introduced the 23andMe+ service, promising investors that millions of people would sign up to use it. In reality, only a few hundred thousand customers actually joined.

As funding dwindled, 23andMe conducted several rounds of layoffs in 2023. By April 2024, the company's stock had fallen below $1. Ms. Wojcicki announced she would privatize the company and, with 49% of the voting power, asserted she would prevent anyone from acquiring it. However, both boards of directors of 23andMe rejected her proposal.

Immediately after the company filed for bankruptcy, 23andMe's stock plummeted 60%, falling to $0.73 on March 24.

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