23andMe's valuation down 98%, might be delisted from NASDAQ
What's the story
Once a $6 billion company, 23andMe, a direct-to-consumer DNA testing firm, now faces an uncertain future. Its valuation has nosedived, with stocks at a mere 74 cents, a 98% drop from its peak. The Wall Street Journal has reported that the firm might run out of cash by next year, after CEO Anne Wojcicki spent around 80% of the $1.4 billion raised. Additionally, 23andMe went through multiple layoffs last year.
Problems
Struggling to find a consistent revenue source
Despite its popularity, 23andMe has had difficulty finding a consistent revenue source. Subscription services have underperformed, attracting fewer customers than anticipated. The company's drug development subsidiary, which focuses on discovering drugs for DNA-identified diseases, has yet to produce significant results. Only two of over 50 drug candidates have stepped into early-stage human trials, and their success is still uncertain.
Result
Criticisms and hacking incident impacted company
In recent years, 23andMe has faced challenges such as a data breach where hackers stole personal data from 6.9 million customers. It also faced criticism for providing genetic information to law enforcement. Silicon Valley investor Bruno Bowden told the Wall Street Journal, "It was mildly interesting because of the ancestry information. It powered a few cocktail conversations." With waning interest in uncovering one's genetic heritage, the future of the company hangs in the balance.
History
A look at the rise and fall
At its peak, 23andMe was endorsed by celebrities such as Oprah Winfrey, Lizzo, and Eddie Murphy, who swore by its ancestry tests, possible by only spitting in a test tube. CEO Wojcicki was also anointed by Forbes, as the "newest self-made billionaire." Now its fortunes have turned. The company conducted three rounds of layoffs in 2023 and is on the verge of being delisted from NASDAQ. What is perhaps most shocking is that the firm has never made a profit.