The Fall of the $6 Billion Giant That Was Once 'Bigger Than Google'

Once a $6 billion company, at-home DNA testing company 23andMe filed for bankruptcy over the weekend.

Anne Wojcicki built the 'giant' 23andMe but also caused it to plummet - Photo: AFP

Before filing for bankruptcy, 23andMe had been on a downward spiral, burning through more than $1 billion and laying off more than half of its staff. The board of directors resigned en masse in September over disagreements with co-founder and CEO Anne Wojcicki’s strategy for running the company.

The Giant

According to the Wall Street Journal , Ms. Wojcicki is not ready to let go, declaring that she will seek to buy back the company.

The optimism and “can-do” belief that helped Ms. Wojcicki build a company that brought DNA testing to millions of people’s homes, however, that same spirit also drove Ms. Wojcicki to pursue costly strategies to exploit 23andMe’s data to develop drugs and provide health care, which ultimately failed.

Now, the odds are against Ms. Wojcicki. Her super-voting stock was stripped from her in bankruptcy court. Her previous bids to buy the company have been repeatedly rebuffed.

“Innovation in healthcare is incredibly difficult. 23andMe pioneered a completely different approach, empowering individuals directly with access to important information about themselves, helping them think about genetic identity and personalized preventive care in a completely new way,” said Wojcicki.

Wojcicki grew up in Silicon Valley, the daughter of a former Stanford University physics department head. After college, she worked at financial firms analyzing healthcare companies, before joining Linda Avey to co-found the genetics startup now known as 23andMe.

Initially, 23andMe struggled to gain traction in its testing, which cost as much as $399 in 2008. To gain traction, the company held “spit parties” at high-profile events like New York Fashion Week and the World Economic Forum in Davos, where celebrities spat into 23andMe test tubes to provide DNA samples.

Then, 23andMe dropped its price to $99, making it more accessible. Stories of customers discovering their lost siblings or biological parents sent 23andMe into a social media frenzy.

Sliding downhill

After going public in 2021, the company was valued at more than $6 billion, and CEO Wojcicki joked that it was “bigger than Google.” But it has struggled to generate recurring revenue.

The difficulty with 23andMe since its inception is that customers usually only need to do a DNA test once in their lifetime, meaning they only pay once.

So Wojcicki began looking for new ways to monetize the company’s vast trove of genetic data. She raised more money and poured it into drug development to create breakthrough drugs. But it was risky, because bringing a new drug to market can take years and cost hundreds of millions of dollars.

Ms. Wojcicki then spent $400 million to buy the telehealth company Lemonaid Health, hoping to use genetic reports to help improve patient care. That plan also failed, and Lemonaid’s revenue fell by half.

In 2020, Ms. Wojcicki launched 23andMe+, promising investors that millions of people would sign up for the service. In reality, only a few hundred thousand customers actually joined.

As cash dried up, 23andMe instituted several rounds of layoffs in 2023. By April 2024, the company’s stock had fallen below $1. Wojcicki announced that she would take the company private, and with 49% of the voting power, she would block anyone from buying the company. However, two separate boards of directors rejected her proposal.

Immediately after the company filed for bankruptcy, 23andMe shares plunged 60%, to $0.73 on March 24.

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Source: https://tuoitre.vn/su-sup-do-cua-ga-khong-lo-6-ti-usd-tung-tinh-lon-hon-google-20250327231223221.htm