Anne Wojcicki Had a Fully Financed Plan to Take 23andMe Private. Then It Fell Apart.

23andMe CEO Anne Wojcicki has been trying to take the DNA testing company private this past year, making clear along the way that she would oppose any deal to sell the business to someone else. Wojcicki later softened her opposition, but that didn’t stop her from trying to buy the company she co-founded. A flurry of new proposals from Wojcicki over the past month failed to win over the company’s board of directors. Now 23andMe is preparing to sell its assets under bankruptcy protection.

The Chapter 11 filing made Sunday comes with a C-suite shakeup. Wojcicki resigned from her role as CEO, though she will remain on the board. Chief Financial and Accounting Officer Joe Selsavage is taking on additional responsibility as interim CEO.

The main way 23andMe makes money is by selling genetic testing services to consumers. The company also strikes deals with pharmaceutical companies that use de-identified genetic data to aid their drug discovery work, but this offering never became a big part of the company’s business. For the nine months ended Dec. 31, 2024, 23andMe reported $144.7 million in total revenue, down nearly 7% compared to the same period in the prior financial year. In the fiscal year ended March 31, 2024, revenue was $219.6 million, down 27% from the prior fiscal year. In its financial reports, the company attributes the declining revenue to lower sales volume for its test kits.

When 23andMe went public in a 2021 SPAC merger, its stock traded at $10 per share. The company’s stock price has been on a downward slide in the past 12 months. The bankruptcy filing comes nearly a year after 23andMe announced Wojcicki was considering taking the company private by acquiring the shares of the company she does not already own.

The 23andMe board formed a special committee tasked with reviewing Wojcicki’s offer. The board, whose duty is to act in the best interest of all shareholders, rejected her offer of 40 cents per share. While it’s possible another company might have been willing to pay more, it would not matter. Wojcicki’s ownership of class B shares come with greater voting power than class A shares, and she could block such a deal. The board told Wojcicki her offer did not offer a premium to shareholders and lacked committed financing.

Last September, seven members of 23andMe’s board resigned due to differences with Wojcicki over the direction of the company, leaving her as the lone remaining board member. In October, the company appointed three new directors to regain compliance with a Nasdaq requirement that the majority of a company’s board be independent directors.

The three new directors, also newly appointed to the special committee, announced in late January the exploration of strategic alternatives. These alternatives include a possible sale of 23andMe, a business combination, or a sale of the company’s assets. This time, Wojcicki said she would not oppose a deal.

“Based on subsequent developments in the interim period since that statement, I am revising my statement to indicate my willingness to consider third party takeover proposals for the Company or other strategic alternatives that may be in the best interests of the Company,” she said in a regulatory filing.

Despite Wojcicki’s newfound openness to selling 23andMe to another company, her interest in acquiring it herself did not wane. On Feb. 20, Wojcicki and New Mountain Capital sent the special committee a non-binding proposal to buy all outstanding shares not owned by Wojcicki or her affiliates for $2.54 per share. New Mountain would fully finance this proposed transaction; the investment firm and Wojcicki were also willing to provide financing for 23andMe’s operation through the closing of a potential deal. The proposal was not subject to any financing contingency. But it soon fell apart.

On Feb. 28, New Mountain told Wojcicki that the firm was no longer interested in being part of a potential 23andMe acquisition, according to a regulatory filing. Wojcicki remained committed to buying the company and delivered another non-binding proposal, this time for 41 cents per share. This March 2 proposal would be fully financed by Wojcicki. She sent an amended proposal four days later, adding a $2.53 per share contingent value right, a cash payout triggered upon the achievement of revenue milestones in the next three fiscal years.

On March 10, Wojcicki further sweetened the offer by committing to provide 23andMe with an additional $20 million to fund its operations. But there were signs that minority shareholders were not on board with Wojcicki’s plan. Zentree Investments bought more 23andMe stock to boost its ownership stake to 13% of the company’s class A shares. In a March 17 regulatory filing related to this transaction, Zentree said it wants to ensure minority investors have a voice.

“We seek to prevent the sale of the company at an unreasonable price and advocate for more prudent management of the company’s costs,” the firm said in the filing associated with the stock purchase. “Additionally, we appeal that Class A and Class B shares be granted equal rights. We urge the management to act in the best interests of all shareholders and to address any conflicts of interest between management and investors.”

The bankruptcy, case number 25-40976, was filed in U.S. Bankruptcy Court for the Eastern District of Missouri. During bankruptcy proceedings, 23andMe said it will continue to run its business under the court’s supervision. The company said it has received a commitment from JMB Capital partners for debtor-in-possession financing of up to $35 million to support its business.

23andMe said it will ask the court to begin a process to sell substantially all of its assets under Chapter 11 of the bankruptcy code. With the court’s approval, the plan is to solicit qualified bids over the course of 45 days. If multiple qualified bids are received, 23andMe will hold an auction for those assets. 23andMe said any buyer will be required to comply with the law regarding the treatment of customer data. Transactions will still be subject to regulatory approvals.

Bankruptcy auctions typically result in fire sale prices for company assets. In 23andMe’s bankruptcy filing, the company states its assets are between $100 million and $500 million. It has an estimated $100 million and $500 million in liabilities. Creditors include National Genetics Institute, a Los Angeles-based subsidiary of Labcorp; marketing company Jellyfish; and Blue Shield of California.

In addition to the appointment of Selsavage as interim CEO, the board also appointed Matt Kvarda, a managing director at consulting firm Alvarez & Marsal, as chief restructuring officer. The board also added a new member. Thomas Walper, a former partner in the financial restructuring practice at Munger, Tolles & Olson, was appointed to the board and the special committee as an independent director.

23andMe’s stock price closed Monday at 73 cents, down 59.2% from Friday’s closing price.

Image: BlackJack3D, via Getty Images