A major British investor is exploring a potential rescue plan for 23andMe, after the consumer genetics company filed for bankruptcy protection in the US.
Richard Magides, director of Singapore-based Zentree Investments, and one of the firm’s largest shareholders, had been reportedly increasing his take in the firm in the lead up to its Chapter 11 filing.
Zentree held a 9.6 per cent stake at the time, making it the company’s second-largest shareholder.
Magides has indicated a willingness to contribute further funding, contingent on specific changes within the business.
He said that 23andMe remains a viable company with the potential to reach a valuation of over $1bn (£800m), if adjustments were to be made.
23andMe was founded in 2006 by Anne Wojcicki, and quickly became one of the most well-known consumer DNA-testing firms, offering genetic reports on ancestry and health.
The company received $300m from UK pharmaceutical firm GSK in 2018, and went public three years later after merging with an acquisition firm linked to Sir Richard Branson, which valued it at $3.5bn.
Despite amassing over 15m customers, the firm had struggled to generate consistent, recurring revenue, and maintain profitability.
Wojcicki has stepped down as chief executive and will be pursuing a separate take private bid independently.
Magides said the company has been slow to reduce cash burn, and crucially needed better financial management.
Linda Avey, cofounder and former director, also said on Wednesday that 23andMe had “lost its way”, due to a lack of “consumer-focused product development” and “proper governance”.
Yet, Magsides added: “Advancements in AI, when paired with DNA and clinical data, are likely to lead to multiple breakthroughs.”
The bankruptcy filing raised concerns around the security of sensitive customer DNA data under a potential new owner.
23andMe board member Mark Jensen stated that the data privacy will be a top priority in any transaction, despite US state attorneys advising customers to delete their information.
GSK, previously a strategic partner, held a 7.2 per cent stake in 23andMe at the time of the bankruptcy filing.
The pharmaceutical titan initially entered an exclusive collaboration with the firm in 2018, and later shifted to a non-exclusive data license in 2023.
