Spit into a test tube, send it to Silicon Valley, then sit back and wait for information about your ancestry and genetic health risks. For more than 15 million people, taking a 23andMe test once seemed like a good idea.
For around 80% of customers, their interaction with the company went even further—they opted to have their data used in health research. That’s how 23andMe amassed one of the largest DNA databases in the world, with ambitions to see all those DNA strands one day deliver new medical breakthroughs.
But many 23andMe customers began to rethink the wisdom of sharing DNA with the company in 2023, when hackers broke into its database and accessed detailed information about nearly 7 million people. Then, last week, 23andMe filed for bankruptcy, triggering an all-out panic and warnings that customers should delete their data from the site before its assets are sold.
Amid calls for stepped-up regulation over how private companies use personal data, 23andMe has attempted to reassure customers that it’s doing all it can to keep their data from falling into the wrong hands. In an open letter, it wrote that the Chapter 11 filing “does not change how we store, manage, or protect customer data” and vowed that privacy will be “important considerations in any transaction.” But that hasn’t stopped speculation about where the data may land after a May 14 auction.
On March 31, the U.S. Federal Trade Commission weighed in, writing a letter to the agency that oversees bankruptcies saying that whoever buys 23andMe should be bound by the same privacy agreement as the company’s existing policy. Among other things, the company has promised customers that it will not share any information with employers or health insurance companies unless it has their written consent.
So far, only a few interested parties have made it known publicly that they’re interested in buying 23andMe, along with its its massive data set. Here’s a look at four potential buyers:
Nucleus Genomics
Nucleus is a whole-genome testing company based in New York and backed by investors like Peter Thiel-led Founders Fund, and Reddit cofounder Alexis Ohanian. Nucleus’s CEO Kian Sadeghi first floated the possibility of buying 23andMe several months ago and is revisiting the idea now that the company has filed for bankruptcy.
Sadeghi calls Nucleus the Netflix to 23andMe’s Blockbuster, suggesting it’s the next iteration of genome testing because it covers whole genomes using newer technology. On its website, Nucleus states that all of its customer data “will be used and shared in compliance with HIPAA requirements.”
Nucleus offers customers $400 tests that it says can identify health risks for more than 900 conditions. But the company also attracted controversy for launching and defending a genetic IQ test, which is no longer available on the site.
Sadeghi tells Fortune that he’s most drawn not to 23andMe’s data, but to Lemonaid, the telehealth company that 23andMe bought in 2021. He wants to start integrating genome testing and a healthcare practice, something 23andMe had just begun to do. “There’s a much larger opportunity here to, first and foremost, realize the power of the genome,” Sadeghi says.
The Sei Foundation
The Sei Foundation, a nonprofit dedicated to driving adoption of the Sei high-speed blockchain platform, says it sees an opportunity in 23andMe’s bankruptcy to demonstrate how blockchains and decentralized networks could be used for more than just cryptocurrency transactions.
The foundation is an advocate for DeSci, short for decentralized science, a movement to make scientific research more transparent and collaborative. In a post on X, it recently described a vision for buying 23andMe, putting its millions of data points on the blockchain, and returning it to its original owners “through encrypted, confidential transfers.” The organization says its plan would allow people to control “how their data is monetized and share in the revenue.”
Eleanor Davies, head of DeSci at the Sei Foundation, says the organization sees itself as the perfect 23andMe buyer when it comes to protecting data privacy and combining “the ethics of the decentralized science movement” with 23andMe’s rich data.
Justin Barlow, head of business development, adds that this application would be fully compliant with health data and privacy laws.
“The legal issues involved are not specific to whether or not the data is stored on chain, and the current policy requires notice and new approvals from customers in the event of a sale of assets or change in control,” said Gerald Gallagher, general counsel for the foundation.
Pinnacle
Ryan Sitton, CEO and cofounder of analytics company Pinnacle, was bullish on buying 23andMe before it filed for bankruptcy. In an online post addressing the company’s shareholders, he said he would purchase the genetics testing company for $100 million, far more than an offer from former CEO Anne Wojcicki that was before the company.
“[W]e believe that our algorithms combined with your data can give people more insight into their long-term health than ever before,” he wrote.
Sitton, an entrepreneur, engineer, and former elected Republican politician who was commissioner of the Texas Railroad Commission, did not submit a formal offer at that time, but he told Fortune that he sees a huge opportunity for the U.S. to reduce healthcare costs using genetic testing. Giving people information about their health risks allows them to focus on prevention, he said, adding, “I think this is this kind of thing that could change the world.”
Since 23andMe’s bankruptcy, a spokesperson for Pinnacle has said the private company is “discussing our path forward and still has serious interest” in the data tester.
Anne Wojcicki
Anne Wojcicki, a cofounder of 23andMe and its former CEO, stepped down on the same day that the biotech filed for bankruptcy. But she made it clear that she wasn’t exactly leaving. Instead, she still hopes to resuscitate the company by buying it herself. “I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” she wrote.
A spokesperson for Wojcicki declined to offer any further comment.
Wojcicki led 23andMe for 19 years and is seen as a pioneer in genetic medicine. However, the once-$6 billion company never became profitable.
The ex-CEO has tried to buy the company twice before. Her first foray into going private, with a proposal the board deemed too low and not properly financed, ended when all seven of her former board members quit on the same day. In early March, Wojcicki put together a second proposal to buy the company and presented it to her new, smaller board. That bid was also rejected.
“We have had many successes but I equally take accountability for the challenges we have today,” Wojcicki wrote in her post the day she resigned. “There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering.”
This story was originally featured on Fortune.com
