Once portrayed as a pioneer in consumer genetics, 23andMe (ME) filed for Chapter 11 bankruptcy on Sunday, leaving behind a trail of angry customers, agitated investors, and a massive question mark over the future of millions of DNA records. The company, which once promised to revolutionize healthcare with a simple spit test, also announced the resignation of CEO Anne Wojcicki. ME stock crashed nearly 60% on Monday, dropping below $1 per share, signaling a dramatic fall for a firm once valued at over $6 billion.
The Race to Delete Data in Time
Now, According to The Wall Street Journal, customers are flooding 23andMe’s website in a panic, trying to delete their personal genetic data before the company’s potential sale of its assets. Many reported long wait times, website errors, and confusion over whether their data was being deleted. Some even tried and failed to remove the data of deceased family members.
They’re concerned about what will happen to their personal data with a new owner, and their fear isn’t unfounded. In 2023, a security breach at 23andMe exposed sensitive information from nearly 7 million users, shattering consumer confidence. Now, with bankruptcy looming and new ownership possible, people are worried their genetic information could be sold or mishandled without their full consent.
While the company says its privacy policy still applies, and any buyer will need to comply with the law, legal experts note that 23andMe is not bound by HIPAA, the U.S. law that typically protects health data. Instead, individual state laws — like those in California and Illinois — will govern what happens next. A new owner could change the privacy policy, but customers would have to agree to any new terms.
Investors Lost Almost Everything
The business side of the story is just as bleak. Investors who bought into the hype during its SPAC-fueled public debut in 2021 have seen nearly all of their value erased. Despite efforts to pivot the business, including a subscription service and a push into drug development, the company struggled to find sustainable revenue.
Anne Wojcicki, once the company’s face, has stepped down as CEO but says she still hopes to buy back the business. She remains on the board, though the bankruptcy process has wiped out her supervoting shares, which once gave her near-total control.
More than 15 million people shared their DNA with 23andMe. They wanted to learn about their ancestry and health risks and maybe even find unknown relatives. But they likely didn’t imagine their most personal data would end up in the middle of a bankruptcy court.For both customers and investors, the collapse of 23andMe is more than a failed startup story. It’s a warning. When personal data becomes a company’s most valuable asset, the risks go far beyond dollars and cents.
