DNA testing firm 23andMe has filed for bankruptcy in the United States following what was reported as weak demand since a catastrophic data breach in 2023.
As Reuters reported, founding CEO Anne Wojcicki announced her resignation but has quickly attempted to buy the company back at a much lower valuation than it had once peaked at.
Fortune originally reported that Wojcicki recently offered more than $74 million for the company, but soon updated its report with an SEC filing purporting to show an new purchase offer worth $42 million.
The recent valuations are light-years away from the $6 billion the company was reportedly worth after going public in 2021.
As Blaze News noted in early 2024, 23andMe’s reputation took a massive hit when customers of the DNA-identifying company had their data breached, an infiltration that impacted 6.9 million account holders. This totaled nearly half of the company’s users and resulted in dozens of lawsuits.
‘Users negligently recycled and failed to update their passwords …’
In a letter sent to users from a legal firm representing 23andMe, the company denied fault and shifted the blame onto users for using “recycled” passwords.
Cyber criminals used a method known as “credential stuffing,” which involves hackers using login credentials taken from other hacks to attempt to log in to different online accounts belonging to the same person.
The 23andMe hack was accomplished through this method, with hackers gaining access to 14,000 user accounts, then using that access to gain further entry into the company’s database of users who had opted into the website’s DNA Relatives feature.
“As set forth in 23andMe’s October 6, 2023 blog post, 23andMe believes that unauthorized actors managed to access certain user accounts in instances where users recycled their own login credentials — that is, users used the same usernames and passwords used on 23andMe.com as on other websites that had been subject to prior security breaches, and users negligently recycled and failed to update their passwords following these past security incidents, which are unrelated to 23andMe,” the letter claimed.
Anne Wojcicki is the sister of recently deceased YouTube CEO Susan Wojcicki, who was not seen favorably by YouTube content creators due to ongoing censorship and monetization issues.
The family connections have resulted in users asking where their data went, how it has been used, and why the founding CEO wants to buy back a failing company.
23andMe has been unable to maintain its user base since the data breach, with marketing ploys like continued feedback and personalized wellness plans failing to acquire repeat customers.
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