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23andMe Files for Bankruptcy. Here’s What Happens to Your DNA
Jared Dashevsky, MD
March 30, 2025 • Estimated Reading Time: 12 minutes
GRAND ROUNDS
23andMe Files for Bankruptcy. Here’s What Happens to Your DNA
Two weeks ago, I wrote about 23andMe’s impending collapse—financial distress, massive layoffs, and a business model unraveling in real time.
I also polled everyone, asking what would happen next for 23andMe:
Now, it’s official: 23andMe has filed for Chapter 11 bankruptcy in a court-supervised process aimed at selling the company or its assets. The goal is to “maximize stakeholder value.” And the one incredibly valuable asset 23andMe has left that truly matters: your DNA.
In this article, I’ll quickly highlight 23andMe’s downfall and then dive into what happens next for the 14+ million people who handed over their genetic data.
How We Got Here
If you’re just tuning in, here’s a quick refresher on how 23andMe ended up here.
The company once positioned itself as the biggest name in consumer healthcare—bringing genetic testing straight to consumers, enabling personalized health reports, and launching ambitious drug discovery efforts with pharma partners like GSK.
But behind the scenes, the numbers were grim.
Based on their most recent Q3 FY25 earnings report:
Revenue is artificially up: 23andMe pulled in $60.3M in Q3 FY25, which at first glance looks like a solid 35% YoY increase. But that’s entirely artificial—$19.3M of that came from a one-time research payment from GSK. Without that, revenue is in decline.
Consumer business is tanking: Their core DNA testing and telehealth business shrank, with a $6.4M drop in genetic testing revenue and a $1.5M drop in telehealth revenue. The market for DNA kits is saturated, and they still haven’t figured out how to replace that revenue.
Cash is burning fast: Cash reserves plunged from $216.5M (March 2024) to just $79.4M (December 2024). They burned $47.2M in the last quarter alone.
Major cuts: They cut 40% of their workforce, abandoned their Therapeutics Division, and attempted to pivot to GLP-1 weight loss telehealth via Lemonaid Health. That effort was likely short-lived, especially after FDA crackdowns on compounded semaglutide.
Most importantly, the company explicitly acknowledged “substantial doubt” about its ability to continue operating without new capital.
Now we know how that ended.
The Deets: Chapter 11 Bankruptcy
As part of the bankruptcy process, 23andMe co-founder Anne Wojcicki has officially stepped down as CEO so she can position herself as an independent bidder.
In her public statement, she expressed disappointment in the board’s decision to reject her earlier acquisition offer but reaffirmed her belief in the company’s mission:
Since 2006, we have built an incredible consumer brand with one of the world’s largest and most diverse genetic communities… If I am fortunate enough to secure the company’s assets through the restructuring process, I remain committed to our long-term vision.
She’s not wrong—23andMe really democratized genetic data. It made consumers curious about their genes, opened up access to personal health insights, and built one of the largest opt-in research platforms in the world.
But none of that could offset the burn rate, the public trust issues following a 2023 data breach, or the slow unraveling of its R&D pipeline.
So, What Happens to the Data?
As 23andMe shops itself around to potential buyers, the company’s most valuable asset is the data: a genetic database from over 14 million consumers.
The key question is: can that data be sold?
And the key answer is: yes. Here’s why:
HIPAA doesn’t apply. 23andMe isn’t a covered entity under HIPAA. Your DNA data doesn’t receive the same protections as medical records from your doctor or hospital.
Bankruptcy courts prioritize creditors. If selling the data helps repay debt, courts can approve it—even over consumer objections.
Their privacy policy allows it. The company’s terms explicitly state that user data may be transferred in the event of a sale or bankruptcy.
State and federal protections are limited. Laws like GINA prohibit discrimination based on genetic information, but they don’t stop companies from selling it. The FTC can only intervene in cases of deception—not if 23andMe is simply following its own privacy policy.
Even if you’ve deleted your account, any data you opted into for research or regulatory retention might still be available—and now on the table as part of a corporate asset sale.
What Buyers Could Want
Wojcicki has already signaled she’ll bid. But others may want a piece too.
Private equity firms, biotech companies, even data brokers could view 23andMe’s DNA library as fuel for clinical research, drug development, or targeted health marketing.
If sold, the DNA of millions of consumers could be used in ways they never anticipated. And there’s no federal law stopping it.
Dashevsky’s Dissection
23andMe’s collapse is a cautionary tale about what happens when healthcare meets consumer tech without guardrails.
For years, 23andMe was a poster child for the “Consumerism 1.0” era in healthcare—where startups gave people slick, easy access to health insights without the friction of doctors, hospitals, or insurers. Consumers became the patient, the lab, and the record-keeper—all in one.
But as I’ve written before, we’re now entering Healthcare Consumerism 2.0—a phase that demands more than just access. It calls for accountability, integration, privacy, and protection. And this is where 23andMe fell short.
The uncomfortable truth: When a consumer health company dies, your data doesn’t die with it.
23andMe had your DNA—and now, as part of Chapter 11 proceedings, that data could be sold to the highest bidder. There’s no federal law preventing it, and their privacy policy allowed for data transfer in the event of a sale or bankruptcy.
But what about the next wave of health tech companies?
What happens if Oura goes bankrupt? Or Levels? Or any number of DTC lab platforms or wearable tech companies?
The answer, unfortunately, is the same: if they’re not considered “covered entities” under HIPAA, your health data is treated like any other digital asset.
Even if the company promised user privacy in broad strokes, most privacy policies include language allowing data transfers in the event of acquisition or bankruptcy.
And obviously, the more valuable the data, the more likely it is to be sold.
Oura has amassed a massive trove of biometric data tied to sleep, heart rate, menstrual cycles, and more.
Levels is building a metabolic health dataset based on continuous glucose monitors.
Other startups track fertility, brainwaves, microbiomes, and mood.
None of that is protected like your electronic medical record. If these companies go under, that data could be bought, repurposed, or integrated into entirely new business models—with little say from the people it came from.
This is where the line between consumer and patient gets dangerously blurry.
So what’s the takeaway?
Until our laws catch up, the burden is on the consumer to read the fine print. But most of us don’t. And we shouldn’t have to. If we truly want a future where consumers are empowered in their health journeys, we need to build a system that values privacy, transparency, and accountability—before the bankruptcy paperwork gets filed.
COMMUNITY POLL
If a health tech company collects your data to “empower patients”—but then sells it during bankruptcy—was it ever truly patient-centered? |
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