23andMe, the once-pioneering genetic testing company known for its saliva-based ancestry kits, has filed for Chapter 11 bankruptcy protection, the company announced Sunday.
The move is intended to facilitate a sale of the $50 million company, which has faced growing financial struggles, including massive layoffs, executive shakeups, and a major data breach that exposed the personal information of nearly 7 million customers in 2023.
While the company said it will continue operations during the bankruptcy process, the announcement raised immediate concerns about how the sensitive genetic data of millions will be handled during a potential sale.
In response, California Attorney General Rob Bonta issued a consumer alert, warning customers of the “trove of sensitive consumer data 23andMe has amassed” and reminding Californians of their right to request deletion of their genetic data and destruction of their test samples.
“There are no changes to the way the company stores, manages, or protects customer data,” 23andMe said in a statement, attempting to reassure customers and investors.
Despite those assurances, the company’s recent history has rattled public trust. Just last month, 23andMe agreed to pay $30 million and offer three years of credit monitoring to settle a lawsuit over the 2023 data breach.
Co-founder and longtime CEO Anne Wojcicki has also stepped down, saying she did so “to be in the best position to pursue the company as an independent bidder.” She will be replaced on an interim basis by CFO Joe Selsavage.
23andMe has secured a $35 million debtor-in-possession financing commitment to maintain operations while seeking a buyer. The company listed its assets and liabilities between $100 million and $500 million.
Once valued at nearly $6 billion, the company’s stock has plummeted—closing at $0.89, down more than 50%.
