Former CEO of 23andMe Seeking Approval Through Bankruptcy Proceedings
Rewritten Article:
23andMe, a once-popular genetic testing company, finds itself in turbulent waters, having filed for bankruptcy after a series of missteps and misfortunes. Valued at $3.5 billion just four years ago, the company might be fortunate if someone takes it off their hands for a mere $50 million. As a precaution, it's high time to wipe clean your 23andMe data.
The bankruptcy filing came on Sunday, following weeks of a freefalling stock price and unsuccessful attempts to privatize the company and rescue it from co-founder and former CEO Anne Wojcicki. The board of directors expressed a lack of confidence in Wojcicki, rebuffing her last-ditch effort to take the company private for just 41 cents per share, a valuation of a mere $11 million. Disappointed, Wojcicki stepped down as CEO.
In 2021, Forbes hailed Wojcicki as America's newest "self-made billionaire" after she struck a deal with Richard Branson to initiate the 23andMe IPO. Today, however, she's navigating the collapse of her brainchild on X.com, eager to re-enter the game she started. "I have stepped down as CEO to position myself optimally to pursue the company as an independent bidder," she explained in a post on X.
However, Wojcicki admitted that 23andMe was not a responsible guardian of people's data under her watch. The company, launched in 2006 and skyrocketing in popularity after Oprah added its genetic testing kit to her list of "favorite things," promised to delve into the mysteries of a customer's genetics. Unfortunately, 23andMe's fortunes soured in 2023 when a hacker infiltrated its servers, exposing the genetic data of 6.9 million customers.
In a textbook example of how not to handle a crisis, the company initially claimed that only 14,000 people had been affected before admitting to the much larger scale of the breach. To make matters worse, the company then attempted to evade angry customers by secretly changing its terms of service, funneling them into a mass arbitration process. Eventually, 23andMe agreed to pay a $30 million settlement and cover the cost of credit monitoring for the millions of exposed customers.
"Our bedrock was the trust and respect of our customers, and they were always our guiding lights in our decision-making," Wojcicki acknowledged. The data breach irreparably damaged this trust and solidified doubts about the company's ability to safeguard customers' genetic information and generate sustainable profits.
Wojcicki's proposed solutions to save the company included compelling users to allow their genetic data to be used for scientific research. "We now possess the means to mine our dataset for ourselves, as well as to collaborate with other parties," the former CEO told Wired in 2024, displaying a staggering misunderstanding of the situation.
"We've experienced many triumphs, but I equally take responsibility for the challenges we face today," Wojcicki admitted on X upon her resignation. "There's no doubt that the challenges confronting 23andMe due to evolving business models have been real. Consumers are asserting themselves and demanding more control over their health and greater insights into their wellbeing."
Indeed, consumers are taking their health into their own hands. One way they're doing so is by cutting ties with gimmicky genetic testing services like 23andMe. The truth is, there's not much the service can tell you beyond a rudimentary understanding of your ethnic background. Facts are, after 23andMe and similar services flooded the market, many Americans got tested to learn more about their ancestry. However, once they had paid, what more did 23andMe have to offer?
The company attempted to sell a subscription service costing $1,188 per year. A more affordable plan set customers back $298 upfront and $69 annually, but consumers were reluctant to invest in ongoing services that did little to pique their interest. The data breach pushed some customers to delete their accounts and reconsider the personal data they shared with the company.
With Wojcicki out, CFO Joe Selsavage is taking the reins to guide 23andMe through bankruptcy. With $35 in financing to help them through the process and assets and liabilities ranging between $100 to $500 million, we'll have to wait and see what the future holds for the company and the millions of people whose genetic data it houses. In the meantime, it's wise to wipe your 23andMe data clean, just to be safe.
As for Wojcicki, she remains resolute in her belief in 23andMe's long-term vision of being a pioneering force in the realm of genetics. "If luck permits me to secure the company's assets through the restructuring process, I am committed to our long-term vision of being a global leader in genetics and establishing genetics as an integral aspect of healthcare ecosystems worldwide," she declared on X, apparently oblivious to the situation at hand.
**Enrichment Data **
Data Breach Timeline:- April 2023: 23andMe's servers were hacked, resulting in the exposure of sensitive information for nearly half of its customer base.- May 2023: The company initially claimed that only 14,000 accounts were affected, later admitting that the breach had exposed approximately 6.9 million customers.- January 2024: 23andMe changed its terms of service covertly, attempting to force customers into a mass arbitration process following the data breach.- February 2024: The company agreed to pay a $30 million class action settlement and cover the cost of credit monitoring for the millions exposed.
- Despite the tech industry's future looking uncertain for 23andMe, a billionaire and co-founder, Anne Wojcicki, might still have a chance to salvage the company for a significant sum.
- The debacle of the massive data breach in 2023, followed by Tech giant 23andMe's attempt to evade account holders and secretly change its terms of service, has undeniably eroded customer trust.
- With Wojcicki's resignation and CFO Joe Selsavage now leading the company through bankruptcy, it's a critical time for customers to reconsider their own data's safety and wipe their 23andMe data clean.
- As layoffs loom and the company navigates bankruptcy, one may wonder if Wojcicki will prove to be lucky once again or come to understand the need to reconsider her approach to the company's data practices before entering the future of genetics technologies.
