How Will DNA Testing Firm 23andMe’s Bankruptcy Filing Affect Its 15+ Million Customers?

Where do we come from?

This question has vexed the best of the best. It relates not only to where all life came from but also to where our ancestors hailed from, as well as the characteristics and biological traits they possessed and passed on, essentially, what shaped our genetic composition.

This is what personal genomics and biotechnology firm 23andMe set out to answer when it was founded in 2006 with DNA testing. The company provided customers with insights into their ancestry across 4000+ regions worldwide. The company offered saliva-based direct-to-consumer genetic testing through kits (currently priced at $119), which even won Time’s “Invention of the Year” title in 2008.

23andMe also researched new kinds of treatments through its biotechnology endeavors, which was supported by the data collected through genetic testing services.

The company gets its name from the 23 pairs of chromosomes typically present in a human cell. 

The Rise And Fall Of 23andMe

Hailed as offering “the most comprehensive ancestry breakdown on the market,” 23andMe hit a high valuation of $6 billion in market capitalization soon after becoming a publicly traded company in 2021, following a series of successful funding rounds.

Sadly, the company has not seen very many good days since then.

Since its high, the company’s valuation has dropped by over 99% and is now valued at just $11 million. A key factor driving the drop was a data breach suffered by 23andMe in 2023 that affected over 6.9 million customers. Here, hackers managed to steal ancestry data of customers over a 5-month period. Eventually, in September 2024, the company agreed to a $30 million settlement in a lawsuit related to the breach, which would include providing three years of security monitoring.

Soon after, independent directors of the Board of 23andMe sent a letter to Anne Wojcicki, CEO, Co-Founder, and Chair of the Board of Directors of 23andMe, resigning from the board. This included Roelof Botha, Patrick Chung, Sandra Hernández, Neal Mohan, Valerie Montgomery Rice, Richard Scheller, and Peter J. Taylor.

Following this, the company also said it was laying off around 40% of its workforce or around 200 employees, while also discontinuing further development of all its therapies as part of a restructuring program. 

23andMe Files For Bankruptcy Protection

On March 23, 2025, 23andMe filed for bankruptcy protection amid drying demand for its DNA testing services and dwindling trust following its data breach.

Through a news release published on its website, the company announced that it has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate a sale process to maximize the value of its business.

Chapter 11 bankruptcy, which is also called a reorganization proceeding, enables struggling businesses to reorganize their debts and continue operating while developing a plan to repay creditors, all under court supervision.

So far, 23andMe has received a commitment for debtor-in-possession (DIP) financing of up to $35 million from JMB Capital Partners, which will allow it to keep operating during proceedings. “Orders and subscriptions will continue as normal, and any purchases or genetic testing kits sent in for processing will be handled without disruption,” says the company.

23andMe’s assets and estimated liabilities are listed between $100 million and $500 million.


“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” said Mark Jensen, Chair and member of the Special Committee of the Board of Directors.

Yes, the company is looking to facilitate the sale of the company and its assets—including large sets of DNA data—despite rejecting multiple takeover bids by CEO and Co-Founder Anne Wojcicki. Wojcicki’s last bid of 41 cents per share valued the company at approx. $11 million.

“While I am disappointed that we have come to this conclusion and my bid was rejected, I am supportive of the company and I intend to be a bidder,” she said in a statement posted on X. The filing also came with Wojcicki’s resignation as CEO, allowing her to “be in the best position to pursue the company as an independent bidder.”

She’s been replaced by CFO Joe Selsavage on an interim basis.

The company published an open letter to customers, summarizing what the move means for them. 

How Will 23andMe's Bankruptcy Filing Affect Customers?

“Through this process, we will seek to find a partner who shares our commitment to customer data privacy and allows our mission of helping people access, understand, and benefit from the human genome to live on,” reads an excerpt from the letter.

23andMe says the filing will not change how they store, manage, or protect customer data, and any buyer of the company will “be required to comply with applicable law with respect to the treatment of customer data.”

However, the company doesn’t fall under the purview of HIPAA (Health Insurance Portability and Accountability Act) and is governed by its own privacy policies, which can be changed at any time. Meaning a new buyer could gain access to the genetic and ancestral data of over 15 million customers. It doesn’t help that the company has at least 30 partnerships with pharmaceutical and biotech companies, which have access to the data.

This has led to numerous legal experts to question what’s going to happen with the data and what customers can do to protect themselves.

Rob Bonta, the Attorney General of California, issued a consumer alert to customers of 23andMe reminding customers that they can delete their data, destroy test samples, and revoke permission for genetic data to be used for research—considering its sensitive nature—under the Genetic Information Privacy Act (GIPA) and California Consumer Privacy Act (CCPA).

“California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” said Attorney General Bonta. “Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company.” 

This was reiterated by Meredith Whittaker, the President of Signal, through a post on X, “It's not just you. If anyone in your FAMILY gave their DNA to 23andMe, for all of your sakes, close your/their account now. This won't solve the issue, but they will (they claim) delete some of your data. And in the future avoid consumer DNA testing.”

Users can delete their data by logging into their 23andMe account and navigating to Settings > Account > Information > Delete Your Account. Customers can also opt to download their data before deleting it.

Do you think 23andMe will survive its bankruptcy filing?

Let us know in the comments below!