Three years ago, the DNA-testing company 23andMe was riding high, boasting a share price that surpassed even Apple’s.
However, from those exhilarating times when millions eagerly sent in their saliva samples for in-depth reports on their ancestry, family ties, and genetic makeup, it now finds itself in a struggle for survival.
Its share price has significantly dropped, and just this week, it narrowly escaped being delisted from the stock market.
This is particularly concerning for a company that possesses the most sensitive data about its customers, raising serious questions about the fate of its vast and highly valuable database of individual human DNA.
When approached by the BBC, 23andMe remained optimistic about its future, emphasizing its commitment to safeguarding customer data and prioritizing privacy.
But how did this once-celebrated tech firm end up in a situation where it has to confront questions about its very existence?
DNA gold rush
Not too long ago, 23andMe was in the spotlight for all the right reasons.
With celebrity users like Snoop Dogg, Oprah Winfrey, Eva Longoria, and Warren Buffet, millions were receiving unexpected and life-altering results.
Some individuals learned that their parents were not who they believed them to be, or discovered they had a genetic predisposition to serious health issues.
The company’s share price soared to $321. Fast forward three years, and that price has plummeted to just under $5, with the company now valued at just 2% of its former worth.
So, what went wrong? Professor Dimitris Andriosopoulos, founder of the Responsible Business Unit at Strathclyde University, notes two main issues.
First, 23andMe lacked a sustainable business model; after paying for a DNA report, customers had little incentive to return.
Second, the plans to utilize an anonymized version of the DNA database for drug research took too long to yield profits, as drug development is a lengthy process.
He bluntly concludes, “If I had a crystal ball, I’d say they will maybe last for a bit longer. But as it currently is, in my view, 23andMe is highly unlikely to survive.”
The challenges at 23andMe are mirrored in its leadership turmoil.
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 Sergei Brin—remaining from the original team.
Rumors have circulated that the company may soon fold or be sold, claims that 23andMe denies.
“23andMe’s co-founder and CEO Anne Wojcicki has publicly shared she intends to take the company private and is not open to considering third-party offers.”
What happens to the DNA?
Companies rising and falling is nothing new – especially in tech.
But 23andMe is different. “It’s worrying because of the sensitivity of the data,” says Carissa Veliz, author of Privacy is Power. And that is not just for the individuals who have used the firm.
“If you gave your data to 23andMe, you also gave the genetic data of your parents, your siblings, your children, and even distant kin who did not consent to that,” she told the BBC.
David Stillwell, professor of computational social science at Cambridge Judge Business School, agrees the stakes are high.
“DNA data is different. If your bank account details are hacked, it will be disruptive but you can get a new bank account,” he explained.
“If your (non-identical) sibling has used it, they share 50% of your DNA, so their data can still be used to make health predictions about you.” The company is adamant these kinds of concerns are without foundation.
“Any company that handles consumer information, including the type of data we collect, there are applicable data protections set out in law required to be followed as part of any future ownership change,” it said in its statement.
“The 23andMe terms of service and privacy statement would remain in place unless and until customers are presented with, and agree to, new terms and statements.”
There are also legal protections which apply in the UK under its version of the data protection law, GDPR, whether the firm goes bust or changes hands.
Even so, all companies can be hacked – as 23andMe was 12 months ago. And Carissa Veliz remains uneasy – and says ultimately a much robust approach is needed if we want to keep our most personal information safe.
“The terms and conditions of these companies are typically incredibly inclusive; when you give out your personal data to them, you allow them to do pretty much anything they want with it,” she said.
“Until we ban the trade in data, we should be worried.”
Olekanma Favour is a resourceful, self-motivated, and result-driven writer with a passion for crafting compelling narratives and insightful content. She loves tackling complex topics and weaving engaging stories.
When she’s not writing, Olekanma enjoys immersing herself in a good book, exploring new cuisines, and discovering new cultures.