23andMe, the pioneering company to sell DNA tests, has gone bankrupt and announced the resignation of its CEO, Anne Wojcicki, in a shocking twist for the one-time tech darling startup. The company, which became a global phenomenon for its do-it-yourself genetic testing kits, has struggled with declining revenues, regulatory problems, and intensified competition in recent years.
The Chapter 11 bankruptcy filing allows 23andMe to refinance its debt and also to carry on with business. The firm has said that it will use the process to consolidate its business and focus on its core business, which involves its health and ancestry offerings.
“While it is a tough call, it is a necessary one to enable the long-term success of 23andMe,” said a company spokesperson. “We continue to be dedicated to our mission of empowering individuals with information about their genetics and health.”
Wojcicki, 23andMe’s co-founder in 2006, will step down as CEO but still remain affiliated with the company in an advisory capacity. Her exit marks the conclusion of an epoch for 23andMe that was initially hailed as the pioneer in consumer genomics. The firm grew rapidly under Wojcicki, enlisting millions of users and collaborating with pharma companies to leverage its genetic data in carrying out studies.
But 23andMe’s fortunes began to fade as the market for DNA testing kits oversaturated and demand from consumers subsided. 23andMe also faced censure for data privacy practices, with critics being concerned about genetic data storage and release.
“23andMe was ahead of the curve, but it was unable to adapt to a changing market,” said one industry analyst. “Competition picked up, and the allure of DNA testing wore off for many customers.”
The bankruptcy filing is a biting reminder of the woes of the consumer genetics industry. As much as 23andMe and other similar companies have brought about a revolution in accessing genetic information, they have been woefully unable to effectively price their services and retain the customer’s trust.
In the meantime, 23andMe has assured customers that the services of the company will not be affected during the restructuring period. The company has further stated that it is committed to customer data transparency and security throughout the bankruptcy proceedings.
As 23andMe looks to the future, there is a resolve to establish a viable road forward. Whether 23andMe can make it back on its feet in the middle of a competitive and fast-moving industry is to be seen.
For the 23andMe team and Wojcicki, bankruptcy is a wake-up call for humility in a tale that seemed set for higher things. While the company tries to pick itself up from this low point, it is a cautionary tale of risks and volatilities of innovation in the tech and health industries.
