23andMe, the renowned American genetic testing company, has filed for bankruptcy. under Chapter 11 of the United States Bankruptcy Law. This decision comes after years of financial difficulties, a continued decline in demand, and the inability to find a buyer that would allow its survival. Thus, the company, which was once valued at $6.000 billion and has approximately 15 million customers, has assured that it will continue operating while undergoing a court-supervised restructuring process. However, the bankruptcy has raised concerns about the fate of the genetic data of millions of users, especially after the 2023 cyberattack in which Data of more than 7 million customers was leaked.
An unsustainable financial decline
23andMe was founded in 2006 with an innovative proposition: to offer consumers the possibility of knowing their ancestry and predisposition to certain diseases through a simple saliva test. However, Over the years, the company failed to transform its business model into a sustainable operation.Although its IPO in 2021 valued it at $3.500 billion, the company never managed to become profitable.
One of the determining factors in its decline was the difficulty in converting customers into repeat users. Selling genetic testing kits tended to be a one-time purchase, making it difficult to generate consistent revenue. At the same time, the company attempted to diversify with the sale of data to pharmaceutical companies, but this strategy raised concerns about privacy and potential misuse of genetic information.
In the face of the crisis, Anne Wojcicki, co-founder and CEO of 23andMe, has resigned. with the intention of launching an independent bid to acquire the company. Wojcicki had tried on multiple occasions to privatize the company by delisting it, but the board of directors rejected her proposals. In a public letter to clients, the executive at least expressed her commitment to the privacy of user data and assured that he would continue fighting to preserve 23andMe's original mission.
The risk of genetic data
One of the biggest points of concern with the 23andMe bankruptcy is the future of genetic data stored. The company has stated that it will continue to protect its customers' information during the sales process, but privacy experts warn that There is no guarantee that a new owner will not change the conditions of use..
This fear intensified after the aforementioned cyberattack in 2023, in which Hackers accessed the private information of millions of usersThe attack had a significant impact on public confidence and led the company to reach a $30 million legal settlement with those affected.
Privacy advocacy organizations have echoed these warnings and recommended that users delete their information as soon as possible. The current situation has undoubtedly led many to question on how companies handle and protect sensitive data, reinforcing the need for stricter regulation in these cases.
Potential buyers and uncertain future
The bankruptcy proceedings will allow the company to seek interested buyers for its assets. However, so far 23andMe has not confirmed the existence of any specific offers.The restructuring period established by the court will last approximately 45 days, during which time purchase proposals are expected to be received.
Meanwhile, authorities in California have urged customers to consider the deletion of your genetic data from the company's servers. This has created a climate of uncertainty among customers, who now face the possibility of their personal information being used in unwanted ways.
The outcome of the bankruptcy proceedings will determine not only the future of 23andMe, but also that of the vast genetic database it has accumulated over nearly two decades. While some analysts see this crisis as an opportunity for restructuring, others believe it The company has reached a point of no return and its disappearance is imminent. We will see.