In a dramatic and telling twist for one of the most recognized names in personal genomics, 23andMe has filed for Chapter 11 bankruptcy protection, marking a turning point for the once-thriving DNA testing company. As part of its reorganization plan, the San Francisco-based firm also announced that co-founder Anne Wojcicki has stepped down as CEO, although she will continue to serve on the board of directors.
The move follows a series of operational and financial challenges that have mounted since the company went public in 2021. Known for its saliva-based DNA testing kits that promised to revolutionize personal health and ancestry exploration, 23andMe is now in a fight for survival—facing massive debt, customer privacy concerns, and a rapidly shifting biotech landscape.
23andMe Bankruptcy Filing Signals Deep Trouble for DNA Testing Pioneer
The 23andMe bankruptcy filing underscores the steep challenges that have plagued the company in recent years. Once hailed as a trailblazer in personal genetics, 23andMe saw its fortunes change dramatically following a string of setbacks—including a catastrophic 2023 data breach that exposed the sensitive genetic and personal information of nearly 7 million users.
Now, with over $214.7 million in liabilities and about $277.4 million in assets, the company is turning to the courts for protection and breathing room as it attempts to restructure and sell off “substantially all” of its assets.
In a press release, Board Chair Mark Jensen explained that the bankruptcy move is designed to streamline the asset sale process, control costs, and manage mounting legal liabilities and real estate obligations. The company is requesting court approval to cancel certain leases in California as part of its broader cost-cutting efforts.
Anne Wojcicki Steps Down as CEO—But Stays in the Picture
A major component of this restructuring includes the departure of Anne Wojcicki from her position as CEO. A co-founder of 23andMe and one of the most prominent women in Silicon Valley, Wojcicki’s leadership helped catapult the company into the public spotlight in the early 2010s. Her vision of accessible genetic health information made her a household name in biotech.
But amid mounting pressures, Wojcicki’s recent nonbinding proposal to take the company private was rejected by the board. Despite this, she remains committed to the company’s future and intends to submit another bid as 23andMe’s asset sale process continues under court supervision.
Though she’s no longer leading the company day-to-day, Wojcicki’s presence on the board ensures she’ll have a hand in shaping the company’s fate—especially when it comes to finding a new owner or guiding it through the complex bankruptcy process.
What Led to the 23andMe Bankruptcy Filing?
The path to Chapter 11 has been long and rocky. After going public via SPAC in 2021, 23andMe struggled to find a profitable business model. Its core offering—genetic testing kits—once captured the curiosity of millions, but demand plateaued as novelty wore off and data privacy concerns grew louder.
By late 2023, those concerns exploded. A cyberattack exposed the data of nearly 7 million customers, including DNA matches, profile information, and other sensitive records. The incident sent shockwaves through the tech and healthcare industries and sparked lawsuits and government scrutiny.
That breach, followed by a $30 million legal settlement for failing to safeguard user data, further destabilized the company’s financial standing. The lingering effects of that incident are still being felt today, forming a major part of the liabilities now revealed in court documents.
In addition, internal turmoil worsened the situation. In September 2023, all independent board directors resigned. Shortly after, the company announced it was cutting 40% of its workforce, eliminating over 200 jobs and scrapping its therapeutics division entirely.
In January 2024, a special board committee began exploring strategic alternatives, including the potential for an outright sale. By the time March arrived, bankruptcy became the only viable path forward.
Customer Concerns Grow Over Data Security During Bankruptcy
As 23andMe reorganizes under Chapter 11, millions of customers are left wondering what will happen to their genetic data. With the company’s ownership in flux and its long-term future uncertain. The anxiety is building over how this sensitive information will be handled.
In response, the company has issued reassurances that its privacy practices will remain intact during bankruptcy, and that customer data will be protected in any future transition.
However, that hasn’t eased fears for everyone. Following the 2023 breach, many users have already deleted their accounts or requested their data be permanently removed. Legal experts warn that once a company is in bankruptcy. Then customers have limited control over how their data is treated, especially if it’s considered an asset to be sold.
In light of these risks, California Attorney General Rob Bonta issued a public advisory, urging customers to reconsider whether they want their data stored with 23andMe and to take action if they’re concerned.
Can 23andMe Recover—or Will It Be Sold for Parts?
With the Chapter 11 filing now official, the big question is what happens next. The company has already secured $35 million in debtor-in-possession financing from JMB Capital Partners to keep operations going. This funding will help 23andMe continue day-to-day activities. While it searches for a buyer or investor willing to pick up the pieces.
That buyer could be a private equity firm, a biotech competitor, or even Anne Wojcicki herself—should her next bid be accepted by the board.
In many ways, 23andMe’s future hinges on whether someone still sees value in the brand. Its data infrastructure, despite its recent setbacks. There’s no doubt the company still holds vast quantities of genetic data, a potential gold mine in the right hands. But that’s exactly what worries privacy advocates.
Whoever buys 23andMe will also inherit the trust—or distrust—of its millions of users.
What This Means for the Genetic Testing Industry
23andMe’s bankruptcy could have ripple effects across the personal genomics space. Competitors like Ancestry, Helix, and others are likely watching closely, recalibrating their own data protection strategies and financial planning.
The broader market is also taking note. The collapse of one of the industry’s most visible brands might cool investor interest and put future IPOs on ice.
At the same time, this moment could serve as a wake-up call for the entire industry. Privacy can no longer be an afterthought. Customers expect transparency, control over their data, and guarantees that their most intimate biological information won’t be misused or exposed.
Companies that fail to deliver on those promises may soon find themselves following 23andMe’s path into bankruptcy court.
What’s next: 23andMe Bankruptcy Filing and Anne Wojcicki’s Exit
The downfall of 23andMe is a cautionary tale. Once celebrated as a revolutionary force in healthcare and consumer genetics. Now the company’s financial missteps, internal turmoil, and failure to secure customer trust have brought it to the brink.
The 23andMe bankruptcy filing isn’t just the end of an era. It’s a pivotal moment that could redefine how we think about genetic data, privacy, and corporate responsibility in the digital age.
Anne Wojcicki’s resignation marks the end of her tenure. As one of the few female CEOs in Silicon Valley’s health-tech sector. But her continued involvement suggests she hasn’t given up on the company she helped build. Whether she’s the one to rescue it—or whether 23andMe fades into memory—remains to be seen.
What’s clear is that the path forward will be challenging. Not just for 23andMe, but for an entire industry now reckoning with the cost of innovation without accountability.
