Despite its ambitions to become a major healthcare player, 23andMe's valuation is down 98% from its peak and has never turned a profit, according to reporting from The Wall Street Journal.
The San Francisco-based direct-to-consumer DNA-testing business was established in 2006 and is still led today by Anne Wojcicki, co-founder and longtime CEO who reached Silicon Valley stardom in the 2010s. The DNA testing kit and its $399 price tag took off with more affluent customers and "spit parties" in its early days, eventually coming down to a $99 price point in 2012 with a new funding round and clearing the FDA before moving on to become a viral sensation.
23andMe set its sights on healthcare and drug development, an expensive and long-term ambition for a product that first drew consumers out of genealogy intrigue. It acquired a telehealth company in 2021 and, by 2022, the company built a 150-person hub for drug development in San Francisco. In 2023, the company struck an agreement with GSK to split costs and future profits for therapies discovered within its database of DNA samples. After the GSK agreement, Ms. Wojcicki cut half the development team after efforts to raise additional capital proved unfruitful, according to the Journal, and the company reported a data breach exposing 6.9 million users.
Ms. Wojcicki has since turned to subscriptions as a revenue model. 23andMe+ offers personalized health reports, lifestyle advice and unspecified "new reports and features as discoveries are made" for an initial $229 with annual renewals of $69. Subscriptions have been modest. Another includes a more comprehensive, clinical-grade genetic test, as well as standard blood tests and appointments with 23andMe physicians for a flat rate of $1,188 a year, no insurance payments accepted.
The Journal, which based its reporting on interviews with more than 50 current and former 23andMe executives, employees, contractors, board members and others familiar with the company and its CEO, attributed the company's challenges to two things: Customers only need to take the test once and few users receive life-changing results.
"The company has never made a profit and is burning cash so quickly it could run out by 2025," the WSJ reports. 23andMe has spent roughly 80% of the $1.4 billion it has raised.
"It's definitely been harder than we expected. But I don't think that we've executed yet on what the vision actually is," Ms. Wojcicki said in the report. "You know, the thing I found with people who are dismissive is like, you just have to prove them wrong."
Read the WSJ report in full here.