Three years ago, 23andMe was riding high as a DNA-testing powerhouse, with a share price that outperformed even Apple’s. Today, however, the company is grappling with significant challenges, as it fights to stay afloat.
Once a darling of the tech world, 23andMe is now facing a steep decline in its stock price and has narrowly dodged a delisting from the market. The company holds a vast and sensitive database of individual DNA, raising serious concerns about the implications for its customers’ privacy.
In a statement to the BBC, 23andMe expressed optimism about its future, reaffirming its commitment to safeguarding customer data and privacy. Yet, the question looms: how did this once-celebrated firm find itself in such precarious straits?
The Golden Age of DNA Testing
Not long ago, 23andMe was celebrated for its innovative services. High-profile users like Snoop Dogg, Oprah Winfrey, and Warren Buffett brought it into the spotlight, and millions experienced transformative revelations about their ancestry and health. The company’s stock soared to an impressive $321.
Fast forward to today, and that value has plummeted to just under $5, reflecting a staggering loss of 98% in company worth. What went wrong?
Challenges to the Business Model
Professor Dimitris Andriosopoulos, founder of the Responsible Business Unit at Strathclyde University, identifies two key issues. First, 23andMe lacked a sustainable business model; once customers received their DNA reports, there was little incentive for them to return. Second, the timeline for monetizing its anonymized DNA database for drug research proved lengthy, as drug development typically takes many years.
Andriosopoulos bluntly concludes, “If I had a crystal ball, I’d say they may last a bit longer. But as it stands, 23andMe is highly unlikely to survive.”
Leadership Turmoil
The company’s struggles are mirrored by upheaval in its leadership. The board resigned last summer, leaving only CEO and co-founder Anne Wojcicki, sister of the late YouTube CEO Susan Wojcicki and ex-wife of Google co-founder Sergey Brin, from the original team. Rumors abound that the company may soon either shut down or be sold, though 23andMe denies these claims.
The company stated, “Anne Wojcicki has publicly shared her intention to take the company private and is not considering third-party takeover proposals.” Still, speculation persists, with rival Ancestry urging U.S. regulators to intervene if a sale occurs.
The Implications of DNA Data
While the rise and fall of companies is not uncommon, 23andMe’s situation raises unique concerns due to the sensitive nature of the data it handles. Carissa Veliz, author of Privacy is Power, highlights the risks associated with the genetic data provided by users, noting that it also includes information about their relatives, often without their consent.
David Stillwell, a professor of computational social science, adds, “DNA data is different. If your bank account details are compromised, you can simply open a new account. But if a sibling has used 23andMe, they share 50% of your DNA, allowing health predictions about you based on their data.”
In response to these concerns, 23andMe maintains that legal protections are in place for consumer data and that any changes in ownership would not affect existing privacy terms unless customers agree to new conditions.
However, even with these safeguards, the risk of data breaches remains. A year ago, 23andMe itself experienced a hack, prompting further unease from privacy advocates like Veliz, who argues for more robust protections for personal data.
“The terms and conditions of these companies are often broad and inclusive,” she warns. “Until we ban the trade in personal data, we won’t be adequately protected.”
