23andMe: From $6B Unicorn to $305M Nonprofit Sale

On March 24, 2025, 23andMe Holding Co. and its affiliated debtors initiated chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the Eastern District of Missouri (Case No. 25-40976), following a decline from a $6 billion peak valuation to approximately $50 million. The filing came after a data breach affecting nearly seven million customers, the resignation of the company's entire independent board, and the end of a drug discovery partnership with GlaxoSmithKline. Following a two-stage auction in which Regeneron Pharmaceuticals and company co-founder Anne Wojcicki competed, the bankruptcy court approved a $305 million sale to TTAM Research Institute, a nonprofit organization Wojcicki founded to acquire the company's assets—including the genetic data of more than 15 million customers.

Company Background and the SPAC Era

23andMe was founded in April 2006 by Anne Wojcicki, Linda Avey, and Paul Cusenza in South San Francisco, with the company name derived from the 23 pairs of chromosomes in human cells. The company offered direct-to-consumer genetic testing, initially selling kits at $999 before later reducing prices. By 2018, 23andMe had built a database of over five million genotyped customers, with more than 80% consenting to participate in genetic research; more than 80% of customers consented to participate in genetic research.

In June 2021, 23andMe went public through a merger with VG Acquisition Corp., a special purpose acquisition company backed by Richard Branson and Virgin Group. The SPAC deal valued the combined company at $3.5 billion and brought in approximately $592 million in gross proceeds. The stock jumped 35% on its first trading day. At its peak, the company reached a valuation of approximately $6 billion. In 2021, 621 SPACs went public, according to Nasdaq data.

Shortly after going public, 23andMe used a portion of the SPAC proceeds to acquire Lemonaid Health in November 2021 for $400 million, to expand into the telehealth market. The acquisition was aimed at linking genetic insights and healthcare delivery.

Business Segments and Revenue Composition

At the time of the bankruptcy filing, 23andMe operated three distinct business segments, each contributing differently to revenue, as described in the First Day Declaration.

The Personal Genome Service (PGS) segment accounted for approximately 76% of total revenue. This segment sold saliva collection kits enabling customers to learn about their genetic ancestry, carrier status for certain inherited conditions, wellness traits, and—through upgraded memberships—pharmacogenetic insights. Core product lines included the Ancestry Service, Health + Ancestry, and premium membership offerings like 23andMe+ Premium and 23andMe+ Total Health. By March 31, 2024, approximately 550,000 customers subscribed to these advanced memberships, though this represented a small fraction of the company's 15 million total genotyped customers.

Telehealth Services through Lemonaid Health contributed approximately 16% of revenue. This segment offered virtual medical visits, prescription fulfillment, and subscription-based ongoing care in areas including mental health treatment, weight management, and primary care services. The Debtors supported four non-debtor professional medical corporations' medical staff by providing the technology platform, administrative services, and pharmacy operations. Many patients filled prescriptions through 23andMe's mail-order pharmacy subsidiary, LPRXOne LLC.

Research Services generated approximately 8% of total revenue through collaborations with pharmaceutical and biotechnology partners. This segment relied on the company's genetic database. With more than 80% of eligible 23andMe customers consenting to participate in research, the database contained genetic information from over 15 million genotyped individuals. These data supported drug discovery efforts to validate therapeutic targets and facilitated clinical trial recruitment. Although 23andMe ceased its in-house Therapeutics program in November 2024, the Debtors continued to pursue licensing agreements and asset sales related to that discontinued division's intellectual property through the bankruptcy process.

Financial Trajectory and Stock Decline

After the SPAC merger, 23andMe never turned a profit in its nearly two decades of operation. The company pursued subscription models through premium memberships, with approximately 550,000 customers subscribing to advanced offerings like 23andMe+ Premium by March 2024.

From 2020 through the first three quarters of fiscal 2025, 23andMe accumulated net losses of $1.79 billion. In fiscal year 2024, the company generated $220 million in revenue and $99 million in gross profit, but with $781 million in operating expenses—including a $352 million goodwill impairment—23andMe reported a $680 million operating loss. Fiscal 2023 had seen a $312 million net loss, and by fiscal 2024, revenue had declined 27% year-over-year to $219.6 million.

The stock price declined after reaching highs above $17 per share shortly after the SPAC merger (equivalent to over $300 on a split-adjusted basis following the October 2024 reverse stock split). By September 2023, the stock had fallen below $1, triggering a Nasdaq delisting notice. The company received a 180-day compliance period, later extended to November 2024. In October 2024, 23andMe executed a 1-for-20 reverse stock split to regain compliance, but the share price continued to decline. By the time of the bankruptcy filing, shares traded at approximately $0.73—equivalent to just $0.037 per share on a pre-split basis, representing a 99.6% decline from peak valuation.

According to Debtwire data, 40 former SPACs have filed for bankruptcy since 2022.

GSK Partnership and Therapeutics Program

23andMe's strategy to expand beyond consumer genetics included a partnership with GlaxoSmithKline. In July 2018, GSK made a $300 million equity investment in exchange for an exclusive four-year collaboration to leverage 23andMe's genetic database for drug target discovery. The partnership aimed to identify novel therapeutic targets by analyzing genetic data from the more than 80% of 23andMe customers who consented to research participation.

Within four years, the partnership identified over 40 therapeutic programs and advanced an immuno-oncology antibody targeting CD96 into clinical development. In January 2022, GSK exercised its option to extend the exclusive collaboration for a fifth year through July 2023, paying 23andMe a $50 million extension fee.

However, the partnership ended without producing a commercial drug. By mid-2023, GSK chose not to continue co-developing new programs and shifted to a scaled-down, non-exclusive data licensing arrangement, paying $20 million for a one-year license to 23andMe's database. Under this wind-down arrangement, any new drugs arising would belong solely to GSK, with 23andMe eligible only for royalties.

After the partnership ended, 23andMe reduced headcount in its therapeutics division. In August 2023, the company laid off 71 therapeutics employees—approximately half of the division's staff—following 75 job cuts in April. By November 2024, 23andMe announced the complete cessation of its in-house therapeutics program, accompanied by a 40% reduction in total headcount. The therapeutics strategy had not produced commercial results.

Board Governance Changes

In September 2024, all seven independent directors resigned, leaving founder Anne Wojcicki as the sole remaining board member.

Throughout 2024, Wojcicki had pursued taking the company private. In July 2024, she submitted a proposal to acquire all shares she did not already own at $0.40 per share. A Special Committee of the board, formed to evaluate the proposal, rejected the offer as not in the best interests of non-affiliated shareholders. Despite months of negotiation, Wojcicki failed to present what the independent directors considered a viable transaction.

On September 17, 2024, all seven independent directors resigned effective immediately. The departing directors included Sequoia Capital's Roelof Botha, YouTube CEO Neal Mohan, Patrick Chung of Xfund (among 23andMe's earliest investors), Sandra Hernández (CEO of the California Health Care Foundation), Valerie Montgomery Rice (president and dean of Morehouse School of Medicine), Peter Taylor (former ECMC Foundation president), and Richard Scheller.

In their resignation letter, the directors stated: "After months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders." They continued: "While we continue to wholeheartedly support the Company's mission... it is also clear that we differ on the strategic direction for the Company going forward. Because of that difference and because of your concentrated voting power, we believe that it is in the best interests of the Company's shareholders that we resign."

The letter cited Wojcicki's concentrated voting power. She controlled approximately 49% of 23andMe's voting rights through her Class B shares, which carried ten votes per share compared to one vote for Class A shares. This dual-class structure meant that even with the board's objections, Wojcicki retained effective control.

In a memo to employees, Wojcicki said she was "surprised and disappointed" by the resignations but remained committed to exploring strategic options. The stock fell to $0.30 per share following the resignations. The company announced it would search for new independent directors.

Data Breach and Class Action Settlement

In October 2023, 23andMe disclosed a cybersecurity incident. A threat actor used credential stuffing—testing username/password combinations obtained from other data breaches—to access approximately 0.1% of 23andMe user accounts (roughly 14,000 accounts). However, through the platform's DNA Relatives feature, which connects users with genetic matches, the attackers obtained personal data from approximately 6.9 million connected profiles.

The exposed information included account details, location data, ancestry reports, DNA matches, family names, profile pictures, and birthdates. For some users, genetic health data was also compromised. The attackers specifically targeted customers with Chinese and Ashkenazi Jewish ancestry, posting their information for sale on dark web forums—a fact 23andMe initially failed to disclose to affected customers.

The breach triggered litigation. Multiple class actions were filed and centralized in an MDL proceeding in the Northern District of California. Approximately 35,000 arbitration demands were filed. State attorneys general launched investigations, and regulatory inquiries arose in Canada and the United Kingdom.

In September 2024, 23andMe agreed to a $30 million settlement to resolve the class action litigation. On December 4, 2024, U.S. District Court Judge Edward M. Chen conditionally approved the settlement. Following the bankruptcy filing, the settlement fund was increased to $50 million in September 2025. The settlement covers approximately 6.4 million U.S. residents, with eligible claimants able to receive up to $10,000 for documented extraordinary losses, up to $1,500 for documented expenses, or up to $500 for undocumented expenses. All settlement members who enroll receive three years of Privacy & Medical Shield plus Genetic Monitoring services.

Beyond the primary U.S. class action, the bankruptcy case addressed multiple additional litigation streams. On October 8, 2025, the court approved a $9 million U.S. Data Breach Arbitration Settlement to resolve approximately 35,000 individual arbitration demands. A separate Canadian Data Breach Class Settlement provided $3.25 million for affected Canadian customers, and a $3.25 million Pixel Class Settlement addressed claims related to tracking pixel data collection practices. Combined with the primary settlement, the estate faced data breach-related claims exceeding $65 million in aggregate.

State Attorney General Response and Privacy Concerns

The bankruptcy filing prompted actions by state regulators regarding 23andMe's genetic database. On the day of the filing, California Attorney General Rob Bonta issued an urgent consumer alert reminding the company's 15 million customers of their rights under the Genetic Information Privacy Act (GIPA) and California Consumer Privacy Act (CCPA).

Attorney General Bonta's alert emphasized that California consumers can direct 23andMe to delete their genetic data and destroy their biological samples. Under GIPA, consumers can also revoke consent for collection, use, and disclosure of genetic data. The Washington Post urged customers to "delete your DNA data right now", and approximately 1.9 million consumers deleted their data in the months following the bankruptcy filing.

The bankruptcy court appointed a Consumer Privacy Ombudsman. Professor Neil Richards of Washington University School of Law was selected for the role by the DOJ Office of U.S. Trustee, with an initial budget of $300,000. Richards produced a 200-page report concluding it was "highly unlikely" that typical 23andMe customers understood the privacy terms they had agreed to, particularly regarding data transfer in bankruptcy.

A bipartisan coalition of 28 state attorneys general, led by New York Attorney General Letitia James, objected to the sale, arguing that genetic data is too sensitive to transfer without express customer consent. The attorneys general filed formal complaints in the bankruptcy court on June 9, 2025, contending that the sale would violate state privacy laws and the company's own privacy promises to customers. Ten states have enacted specific privacy laws governing direct-to-consumer genetic testing companies, creating multiple state-law requirements for any acquirer.

Prepetition Marketing and Decision to File

Moelis & Company LLC was engaged as investment banker to the Special Committee in January 2025, later expanding its role to advise the company directly. The objective was to evaluate a range of strategic alternatives: sales, mergers, asset dispositions, licensing agreements, and restructuring options.

Moelis conducted outreach, contacting 103 potential counterparties—51 strategic investors and 52 financial investors or financing sources. This process generated 90 introductory calls and resulted in 42 parties signing confidentiality agreements. A public announcement of the strategic exploration was made on January 28, 2025 (view press release).

By February 20, 2025, multiple preliminary non-binding indications of interest had been received, but the company reported that none resulted in an out-of-court solution acceptable to the board. The company reported that the IOIs were preliminary, insufficiently financed, or otherwise unsuitable for out-of-court execution. Anne Wojcicki submitted an indication of interest at $0.41 per share—valuing the company at approximately $11 million—which also failed to result in a transaction.

On March 10, 2025, Wojcicki submitted a final non-binding acquisition proposal, which the Special Committee rejected. Facing liquidity needs and no viable out-of-court alternatives, the board concluded that a court-supervised sale process was required. Wojcicki resigned as CEO upon filing but remained a director and potential bidder.

DIP Financing Structure

The Debtors evaluated three written DIP proposals, according to the First Day Declaration. Following negotiations, the Special Committee authorized discussions on two potentially actionable proposals: one from JMB Capital Partners and one from Anne Wojcicki. The committee selected JMB's proposal after comparing facility size, maturity, cost, conditions, and covenants. The DIP Term Sheet was executed on March 23, 2025.

Moelis Managing Director Andrew Swift supported the DIP Motion, affirming that the prepetition marketing confirmed the absence of viable unsecured or out-of-court financing alternatives.

Sale Process and Auction

The sale process proceeded following the bankruptcy filing. On March 28, 2025, the court entered the Bidding Procedures Order, establishing a timeline that called for stalking horse selection by April 25, an auction on May 14, and a sale hearing on June 17.

The first auction on May 14, 2025 concluded with Regeneron Pharmaceuticals as the winning bidder at $256 million. TTAM Research Institute—a nonprofit Wojcicki had founded in May to acquire 23andMe—served as the backup bidder. However, according to reports, TTAM had been prepared to bid $280 million but the auction concluded before the higher bid was submitted.

On June 4, 2025, the court reopened the auction under a Final Proposal Procedures Order after TTAM made an unsolicited higher offer. The second auction resulted in TTAM winning at $305 million, with Regeneron declining to match the bid. A Regeneron spokesperson cited "its assessment of 23andMe's remaining value" as the reason for not countering. Regeneron remained as backup bidder at $151 million.

On June 27, 2025, the bankruptcy court entered the Sale Order approving the sale to TTAM. The transaction closed on July 14, 2025, with TTAM agreeing to binding privacy commitments including: establishing a privacy advisory board, offering customers two years of free identity theft monitoring, and promising not to sell or transfer genetic data in connection with any future bankruptcy or change of control.

Plan Confirmation and Emergence

On December 5, 2025, the bankruptcy court entered the Confirmation Order confirming the Modified Fifth Amended Joint Plan of Chrome Holding Co. and its debtor affiliates. The plan's effective date occurred the same day. The confirmed plan established a Plan Administration Trust to distribute sale proceeds to creditors according to the Bankruptcy Code's priority scheme, with administrative and priority claims paid in full and general unsecured creditors receiving distributions from remaining proceeds.

The bankruptcy produced total asset realizations of approximately $312.5 million. The Chrome sale to TTAM Research Institute closed at $302.5 million on July 14, 2025, while a separate transaction sold the Lemonaid Health telehealth business to Bambumeta Ventures, LLC for $10 million, closing on the effective date. The estate also received proceeds from the cyber insurer settlement and policy buyback agreement approved December 4, 2025.

The case generated over 250,000 claims with aggregate asserted liabilities exceeding $51 trillion, including data breach-related claims. California alone asserted potential administrative claims exceeding $1 billion. An Official Committee of Equity Security Holders was formed on July 21, 2025. The equity committee filed a Statement in Support of Plan Confirmation on November 18, 2025.

Following confirmation, 23andMe's publicly traded equity was cancelled, and the company was renamed Chrome Holding Co. for purposes of administering remaining estate matters. TTAM Research Institute assumed control of the operating business, including the genetic database and consumer platform. One appeal remains pending: KR OP Tech, LLC filed a Statement of Issues on Appeal on December 23, 2025, challenging certain plan confirmation provisions.

Professional Advisors

The chapter 11 cases involved multiple professional advisory firms across both the Debtors and stakeholders.

Debtors' Advisors

Committee Advisors

Moelis advised the Special Committee prepetition and served as the company's investment banker. Moelis contacted 103 potential counterparties in the prepetition marketing process that preceded the court-supervised sale process.

The case included a Consumer Privacy Ombudsman. Professor Richards was tasked with evaluating whether the proposed sale adequately protected consumer privacy interests under applicable state and federal laws. His 200-page report analyzed the privacy implications of the data transfer and was part of the sale approval process.

Frequently Asked Questions

Why did 23andMe file for bankruptcy?

23andMe filed chapter 11 due to a combination of factors: the company never achieved profitability and accumulated $1.79 billion in losses from 2020-2024; the October 2023 data breach affecting 6.9 million customers led to litigation costs and regulatory investigations; the GSK drug discovery partnership ended in July 2023 without producing a commercial drug; macroeconomic pressures on consumer demand for genetic testing; and the stock price declined 99.6% from peak valuations.

Who ultimately purchased 23andMe?

TTAM Research Institute, a nonprofit medical research organization founded by Anne Wojcicki specifically to acquire 23andMe, won the bankruptcy auction with a $305 million bid. Regeneron Pharmaceuticals was the backup bidder at $151 million after declining to match TTAM's offer.

What happened to customer genetic data?

The genetic data of more than 15 million customers was transferred to TTAM Research Institute as part of the sale. TTAM agreed to binding privacy commitments including maintaining the existing privacy policy, establishing a privacy advisory board, providing two years of free identity theft monitoring, and promising not to sell genetic data in future bankruptcies. Approximately 1.9 million customers deleted their data following the bankruptcy filing.

What was the data breach settlement?

The October 2023 data breach settlement was initially set at $30 million and later increased to $50 million. It covers approximately 6.4 million U.S. residents, with eligible claimants able to receive up to $10,000 for documented extraordinary losses. All settlement members receive three years of privacy and genetic monitoring services.

Why did all the board members resign?

In September 2024, all seven independent directors resigned, citing differences with CEO Anne Wojcicki over strategic direction and her failure to present a "fully financed, fully diligenced, actionable proposal" for taking the company private. They noted that Wojcicki's concentrated voting power (49% of votes through dual-class shares) made their continued service untenable.

What happened to the GSK partnership?

GSK invested $300 million in 2018 for an exclusive four-year drug discovery collaboration. While the partnership identified 40+ therapeutic programs, it ended in July 2023 without producing a commercial drug. GSK transitioned to a $20 million non-exclusive data licensing arrangement, and 23andMe subsequently shut down its therapeutics division entirely in November 2024.

How much did the company lose?

From 2020 through early fiscal 2025, 23andMe accumulated net losses of $1.79 billion. In fiscal 2024 alone, the company reported a $680 million operating loss on $220 million in revenue. The stock declined from a peak of approximately $17 per share to under $0.04 (split-adjusted), representing a 99.6% loss of value.

What role did the SPAC merger play?

23andMe went public through a June 2021 SPAC merger with VG Acquisition Corp. (backed by Richard Branson), raising $592 million. The company is among 40 former SPACs that have filed bankruptcy since 2022.

Who served as Consumer Privacy Ombudsman?

Professor Neil Richards of Washington University School of Law was appointed as Consumer Privacy Ombudsman by the DOJ Office of U.S. Trustee. He produced a 200-page report concluding it was "highly unlikely" typical customers understood the privacy terms regarding data transfer in bankruptcy.

What are the key dates in the case?

The petition was filed March 24, 2025. The first auction (Regeneron winning at $256M) occurred May 14, 2025. The second auction (TTAM winning at $305M) concluded in June 2025. The sale closed July 14, 2025. The plan was confirmed December 5, 2025.

Who is the claims agent for 23andMe?

Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For analysis of restructuring trends and bankruptcy developments, visit ElevenFlo's bankruptcy blog.