23andMe is a company on the ropes. The one-time leader of the DNA analysis market – valued at $6 billion in 2021 – is now worth less than $100 million, a 99 percent drop that makes Labour’s autumn Budget look like a roaring success.
2024 saw 40 percent of staff laid off and a mass exodus from the board of directors. Now, potential buyers are circling at the smell of blood and Anne Wojcicki, CEO and founder, is struggling to keep the company’s head above water.
Anne Wojcicki, CEO of 23andMe (23andme)
How did a successful Silicon Valley startup – an offspring of the tech boom that produced monolithic companies like Google, Facebook and Twitter – suffer such a fall from grace?
23andMe was co-founded in 2006 by Anne Wojcicki. With her ex-husband, Google co-founder Sergey Brin, and her sister Susan, the former CEO of YouTube, Wojcicki quickly became a Silicon Valley power player: her family emblematic of a rare female presence in the male-dominated tech world.
The company’s USP was simple but revolutionary: spit into a tube, send off your saliva samples, and receive a detailed DNA analysis just a few weeks later. It was named Time’s Invention of the Year in 2008. With these results, customers could supposedly discover everything from personal disease risks to far-flung ancestry.
Unlike AncestryDNA, a competitor that stuck to genealogy, 23andMe also provided health reports, eventually diversifying into pharmaceutical development both internally and externally. The company’s pivot towards commercial research projects was made clear in 2018 via a well-publicised deal worth $300m with Glaxo-Smith Klyne; essentially, selling the genetic data of five million customers to the pharmaceutical company for drug research.
This move rapidly accelerated their value as a business – but ethical questions undercut their success. For some, 23andMe were nothing more than data harvesters who exploited customers’ existential curiosities in return for their genetic fingerprint.
Dr Adam Rutherford, a British geneticist and broadcaster, has long been sceptical of the company’s motives, despite having a 23andMe account himself. “They appeal to our sense of belonging and storytelling,” Rutherford argues, “But they were specifically set up in order to harvest people’s genomes: the densest amount of information that exists in the known universe.”
In 2023, the genetic testing company had its biggest setback: a scandalous data breach. After trying to squash the problem, they were forced to admit that the hacking incident hadn’t just accessed 14,000 accounts – as they originally claimed – but almost seven million. A subsequent lawsuit forced them to pay a settlement of $30m but damage to their reputation was incalculable, going on fatal.
23andMe also faced fundamental structural issues. The one-use nature of DNA tests (once you take a DNA test, there is not much point in getting another) meant a shrinking customer base, with consumer revenue falling eight percent yearly since 2021. In a bid to diversify and stem toppling share prices – those fell 70 percent last year – the company pivoted towards healthcare, launching a weight-loss program offering access to drugs like Ozempic and Wegovy. Whether this last-ditch effort can reverse their decline or merely delay the inevitable remains to be seen.
With Wojcicki reportedly looking to sell, the fate of 23andMe’s vast genetic database is now the biggest unanswered question. The chief concern of Nancy Kass, a Bioethics professor at Johns Hopkins University, is to do with custodianship. “If 23andMe does go under, who’s going to buy this data?” she asks. “That’s the real question.”
23andMe’s decline is a case study of a company’s mishaps and a growing distrust of Big Business’ use of data. However, as Dr Rutherford points out, it could be far more straightforward than this. “These kinds of tests are essentially a fad,” he says, “And in the current climate, people are prioritising spending money on heating bills over finding out they’re 40 percent Swedish – which by the way, is impossible.”