Genetic testing tool 23andMe files for bankruptcy to 'maximize business value'
23andMe Initiates Voluntary Chapter 11 Process to Maximize Stakeholder Value Through Court-Supervised Sale Process | 23andMe, Inc.
https://investors.23andme.com/news-releases/news-release-details/23andme-initiates-voluntary-chapter-11-process-maximize/
Attorney General Bonta Urgently Issues Consumer Alert for 23andMe Customers | State of California - Department of Justice - Office of the Attorney General
DNA testing firm 23andMe files for bankruptcy as demand dries up | Reuters
https://www.reuters.com/business/healthcare-pharmaceuticals/dna-testing-firm-23andme-files-chapter-11-bankruptcy-sell-itself-2025-03-24/
23andMe is seeking permission from the Court to begin the process of selling substantially all of its assets pursuant to Chapter 11 bankruptcy protection and Section 363 of the United States Bankruptcy Code. If approved by the Court, 23andMe will engage with investment bankers to sell its business in an auction to maximize the value of its assets.
23andMe has also filed motions with the Court seeking various relief, including the authority to continue to pay employee wages and benefits, and to compensate certain vendors and suppliers. In addition, the Company has filed motions with the Court seeking approval to reject a number of agreements, including real estate leases in Sunnyvale and San Francisco, which would significantly reduce 23andMe's operating expenses.
In addition, 23andMe's CEO, Anne Wojcicki, will step down from her role as CEO at the time of this announcement. She will continue to serve on the company's board of directors, and 23andMe's Chief Financial and Accounting Officer, Joe Selsavage, has been appointed interim CEO to replace Wojcicki.
Mark Jensen, Chairman of the Board of Directors of 23andMe, said, 'After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale is the best path forward to maximize the value of our business. We look forward to moving forward with our efforts under court supervision to address the operational and financial challenges we face, including further reducing costs and resolving our legal and leasehold liabilities.'
In October 2023, 23andMe was hacked using a credential stuffing attack , resulting in the leakage of customer data for 5.5 million people, approximately half of all customers, and genealogy profiles for 1.4 million people.
Genetic testing tool 23andMe hacked, genetic data of 6.9 million people stolen - GIGAZINE
23andMe has since changed its terms of use to make it more difficult for hacked customers to file class action lawsuits. However, 23andMe has still been sued in more than 30 cases by victims of data breaches caused by the hack, and in September 2024, it agreed to pay $30 million to settle the series of lawsuits.
In addition, in November 2024, 23andMe announced that it had laid off more than 200 employees, or about 40% of its total workforce, citing 'operational efficiencies and cost reductions.' At the time, 23andMe said, 'We are taking these necessary steps as we restructure 23andMe and focus on the long-term success of our core consumer business and research partnerships.'
California Attorney General Rob Bonta and others have questioned how the genetic data collected by 23andMe will be handled in this bankruptcy. Therefore, Bonta said, 'California has strong privacy laws that allow consumers to request that companies delete their genetic data. We call on Californians to exercise their rights and ask 23andMe to delete their data and destroy any samples of genetic material that the company holds,' and explained how to delete genetic data from 23andMe.
On the other hand, 23andMe claims, 'We plan to continue business as usual during the sale process, and there will be no change to the way we store, manage, or protect customer data. ' Jensen also said, 'We remain committed to protecting customer data and being transparent about how we manage user data.'
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