23andMe, once a pioneer in at-home DNA testing, has filed for bankruptcy after a dramatic decline in business and growing concerns over data privacy.
The California-based company, known for helping people trace their ancestry and understand their genetic health risks, is now under financial and legal stress.
The biggest question is: what happens to all that DNA data?
Here’s what we know so far.
From $6 billion to bankruptcy
Just a few years ago, 23andMe was riding high. In 2021, it went public through a SPAC deal led by billionaire Richard Branson, hitting a peak market value of $6 billion.
But fast forward to 2025, the company is now worth less than $100 million, and its shares have dropped to just $1.25.
So what went wrong?
- Falling demand: DNA testing kits became a one-time curiosity. Once people got their results, there was little reason to come back or repurchase.
- Data breach: In 2023, the company suffered a major security incident that exposed data from nearly 7 million users, further shaking public trust.
- Failed leadership: Co-founder Anne Wojcicki made multiple attempts to buy back the company but was rejected by the board. She recently stepped down as CEO and interim leadership took over.
$35 million lifeline. But a bigger issue looms.
To keep operating during the bankruptcy proceedings, 23andMe has secured $35 million in financing.
However, its most valuable asset isn’t the kits or technology, it’s the DNA data collected from over 15 million users.
At the company’s first bankruptcy hearing, a judge granted permission for 23andMe to sell this customer data to potential buyers.
This has raised major privacy concerns, with some officials calling for a pause in the sale process and greater oversight.
Will the DNA data be sold?
That’s the big concern. While 23andMe insists that any buyer must follow U.S. privacy laws, experts warn that this does not guarantee your information won’t be used in unexpected ways.
Some key points:
- 23andMe has existing deals with over 30 biotech and pharma companies, including GSK.
- The company’s privacy policy, which most users accept without reading, allows for data sharing under certain terms.
- Even if you delete your account, some data remains, especially if it has been anonymised and used for research.
Legal experts say that once your data is in the system, it’s hard to erase it completely.
Legal and ethical oversight
During the bankruptcy hearing, U.S. Trustee officials called for the appointment of a privacy ombudsman to oversee any sale involving genetic data.
While the judge has not yet made a decision on this, he pushed back the final court hearing to June 17 to allow more time for input from stakeholders and to avoid rushing a sensitive sale.
The company has said it is still allowing customers to:
- Delete their account
- Remove their saliva samples from the company’s biobank
However, due to the high traffic from concerned users, the website has reportedly faced delays and issues in processing those deletion requests.
What happens next?
Here’s what to watch in the coming weeks:
- May 7: Deadline for potential buyers to submit final offers.
- June 17: Final court hearing on the sale process.
- Possible appointment of an official consumer privacy representative to protect user data.
Meanwhile, 23andMe is trying to settle 35,000 legal claims related to the 2023 data breach. The bankruptcy case is also being used to handle that fallout.
Final thoughts
What began as an innovative company promising personalised health insights has now become a cautionary tale. The collapse of 23andMe highlights two major issues:
- The limits of consumer demand for genetic testing
- The risks of storing highly personal information in a world where data breaches and buyouts are becoming all too common.
If you’ve ever used 23andMe, now might be a good time to review your privacy settings and seriously consider deleting your data while you still can.
-By Rinkle Dudhani and the AHT Team
