The Rise and Fall of 23andMe: From a $3.5 Billion Valuation to a $173 Million Market Cap
In early 2021, the personal genomics company, 23andMe, made headlines as it went public through a merger with a blank check company, valuing it at a staggering $3.5 billion. However, as the year progressed, its fortunes took a nosedive.
One of the main factors contributing to 23andMe's downfall was the waning interest in DNA kits, its primary product. Additionally, news broke that hackers had stolen ancestry data from 6.9 million of its users, further tarnishing the company's reputation.
Now, CEO and co-founder Anne Wojcicki is reportedly looking to take the 18-year-old company private. Despite her initial proposal being rejected by the board in July, she was given time to come up with another deal. However, the independent directors of the company announced their loss of faith in Wojcicki's ability to present a viable proposal, citing her majority voting power as a hindrance.
As a result, the company's market cap closed at a mere $173 million. The departure of key board members, such as Sequoia Capital's Roelof Botha and YouTube CEO Neal Mohan, is expected to further drive down its shares. The looming question now is whether a shareholder lawsuit will ensue.
In conclusion, the once-promising journey of 23andMe from a multi-billion dollar valuation to a significantly reduced market cap serves as a cautionary tale for investors. It highlights the importance of diversification and risk management in the volatile world of financial markets. Investors must remain vigilant and informed to protect their assets and make sound investment decisions.