There was a moment when 23andMe was one of the hottest startups in Silicon Valley. As with so many other startups before it though, the company has cratered since its peak and now has a stock price of less than $1.
This massive rise and fall has left some wondering what happened to the company. Here's everything we know about 23andMe and why the company appears to be on the verge of disappearing altogether.
What happened to 23andMe?
23andMe is a genetic testing company that was valued as highly as $6 billion just a few years ago. However, NASDAQ might delist its stock. The company has also been facing mounting lawsuits over a data breach that happened in 2023.
The delisting of its stock is directly related to the data breach, which seems to be the core explanation for what happened to the company.
The data breach allowed hackers to steal ancestry data from 6.9 million of the company's 14 million users. 23andMe admitted that it failed to detect the data breach for five months after it happened. Thankfully, genetic data wasn't among the stolen information, but the company did acknowledge that the hackers had gained access to usernames, ancestry, birth years, locations, photos, and links between relatives.
Following this massive breach, 23andMe has understandably been flooded with lawsuits. On Jan. 31, 2024, the company was scheduled to speak with 20 lawyers who had filled lawsuits against it. 23andMe hoped to find a way to reach a global settlement. There are currently more than 35 class action lawsuits against the company, and the value of its stock plummeted in the aftermath of the data breach.
The data breach raised several questions about 23andMe.
In addition to the very concrete concerns that the data breach and lawsuits have raised, the breach also raised questions about whether users could feel safe entrusting their data to the service. Hackers have taken that data and run with it, selling it to whoever wants to buy it.
23andMe isn't out of money, but it's veering dangerously close. There are major questions about whether the service will ever be able to attract a large-scale user base again.
23andMe was also in the midst of an attempted transformation from a company that simply offers ancestral data to one that uses genetic testing to develop new drugs and offers customized health reports to its users.
While there has been some success on that front, including new drugs that may eventually come to market, it isn't clear whether 23andMe will be around long enough to see those projects through.
While 23andMe certainly has plenty of problems on its plate, all of them ultimately come back to the data breach, and the fact that they didn't identify it quickly or act on it once it was discovered. Now, the company may never recover.