In a dramatic turn of events, DNA testing company 23andMe has filed for Chapter 11 bankruptcy protection in the United States. The decision comes on the heels of a significant cyberattack in 2023 that led to the theft of sensitive data belonging to nearly 7 million customers. The data that was compromised contained users’ genetic predisposition and ancestry reports as well, making this a huge breach of the company’s data security.
The cyberattack painted an even more dire picture for the company. Anne Wojcicki, co-founder and CEO of 23andMe, recently announced her resignation in order to pursue the company as a standalone bidder. This latest move is indicative of her larger strategy to attract enough funding to eventually take the company private. The New York-based company IPOed in 2021. Since then, its market capitalization has tanked by more than 99%, with its stock trading today at $1.79 and its market capitalization value of about $48 million.
Mark Jensen, chair and member of the Special Committee of the Board of Directors, emphasized the rationale behind the bankruptcy filing.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” said Mark Jensen.
After the July data breach, 23andMe found itself embroiled in legal battles as well. As of September 2024, the company had reached a settlement with affected workers over the breach, paying $30 million to resolve the lawsuit. The company’s intent in achieving this settlement was to move beyond the aftermath of the No-Deal cyberattack. They needed to rebuild credibility with their constituents.
Anne Wojcicki expressed her views on the recent developments.
“The 23andMe Special Committee released news today indicating their plan to take the company through the Chapter 11 process. While I am disappointed that we have come to this conclusion and my bid was rejected, I am supportive of the company, and I intend to be a bidder. I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” Wojcicki stated.
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