23andMe Files for Bankruptcy Amid Privacy Concerns

2025

On Sunday, March 23, 2025, 23andMe, a prominent genetic testing company, filed for Chapter 11 bankruptcy protection. The move comes after years of financial difficulties and struggles to find a sustainable business model. Once valued at over $6 billion, the company’s market worth has now dropped to below $25 million, as its stock plunged dramatically, losing nearly 50% of its value in a single day.

Founded in 2006, 23andMe gained popularity for its saliva-based DNA testing kits, offering consumers insights into their ancestry and potential health risks. However, the company’s business model—based on consumers taking the test only once—has limited its revenue growth. Despite being a leader in personal genomics, 23andMe has never turned a profit.

The bankruptcy filing is the latest chapter in the company's turbulent history. In 2023, it suffered a significant data breach that exposed the personal information of approximately 7 million customers. This breach, alongside other operational struggles, led to a reduction in its workforce by about 40% in November 2024.

CEO Anne Wojcicki, a co-founder of 23andMe, resigned following the bankruptcy announcement but will remain on the company's board of directors. In a statement on social media, Wojcicki expressed disappointment over the bankruptcy filing, stating that she believed her resignation would put her in the best position to pursue an independent bid for the company. She also voiced her continued support for the company’s future.

Despite the filing, 23andMe assured customers that its operations would continue as normal during the bankruptcy process and that its data protection practices would remain in place. However, the bankruptcy has raised significant concerns, particularly around the privacy of the genetic data the company has collected over the years. With 15 million customers, many of whom submitted saliva samples to the company, the issue of safeguarding sensitive genetic information has become a critical point of contention.

California Attorney General Rob Bonta issued an urgent consumer alert in response to 23andMe’s financial troubles. The alert, released on March 21, 2025, encouraged Californians to exercise their rights under the state’s strict privacy laws, including the California Consumer Privacy Act (CCPA) and the Genetic Information Privacy Act (GIPA). Bonta urged 23andMe users to consider requesting the deletion of their genetic data and the destruction of any biological samples stored by the company.

Bonta’s warning comes amid growing concerns that 23andMe’s financial instability could lead to the sale or transfer of its customer data to new ownership. This raises the possibility that consumers’ sensitive information could be used in ways they had not initially consented to, potentially violating privacy rights.

23andMe’s privacy issues are not new. The 2023 data breach was followed by a $30 million settlement, and the company has been under increasing scrutiny from lawmakers and privacy advocates. Congressional representatives, including Colorado's Jason Crow, have raised alarms about the implications of storing genetic data, with concerns that such information could be used for surveillance or other invasive purposes.

As the company enters a court-supervised sale process, there is uncertainty about its future. Potential buyers will be required to comply with relevant privacy laws, but the fate of 23andMe’s genetic database remains unclear. The company has assured customers that their data will be protected, but critics argue that proactive measures by consumers are necessary to safeguard their privacy.

The bankruptcy filing highlights the risks associated with companies handling sensitive personal data. 23andMe’s troubles also reflect broader issues within the business world, particularly concerning the wave of companies that went public through special purpose acquisition companies (SPACs) during the pandemic. Once a high-flying trend, SPACs have proven to be an unstable path to public markets. Data from the financial analytics firm Debtwire shows that 23andMe is one of 40 former SPACs that have filed for bankruptcy since 2022.

The company went public in 2021, capitalizing on the popularity of genetic testing. Its brief period of high valuation sparked interest in genomics, but the company’s financial difficulties have now overshadowed its earlier success.

For customers who are concerned about their privacy, 23andMe offers the option to delete their data through its website. Californians can follow specific steps to permanently delete their data, but the company’s bankruptcy filing complicates the process. As 23andMe navigates its financial restructuring, the future of its business—and the security of its users’ genetic information—remains uncertain.

The 23andMe bankruptcy serves as a cautionary tale for consumers and companies alike. As the firm works through its court-supervised process, the focus remains on how it will handle its vast repository of sensitive genetic data and whether customers can trust that their information will remain secure.