- 23andMe has been exploring a possible sale of its telehealth business, Business Insider has learned.
- The struggling health company bought virtual care startup Lemonaid in 2021 for $400 million.
- 23andMe’s stock has plummeted after a 2023 data breach exposed millions of customer accounts.
Struggling genetic testing company 23andMe has been quietly exploring a possible sale of its telehealth offering, Business Insider has learned.
The health company has been testing the waters for a possible buyer for Lemonaid Health, the virtual care business it bought in 2021 for $400 million in cash and stock, people with knowledge of the efforts told BI.
It’s not clear how formal the efforts have been. 23andMe didn’t respond to multiple requests for comment from BI.
When 23andMe acquired Lemonaid, the company said it wanted to provide personalized telemedicine care informed by its genetic data collection.
Founded in 2006, 23andMe seized consumer interest with its genetic testing kits that offered customers breakdowns of their ancestry. Later, in 2017, 23andMe started selling tests that could assess a customer’s health risks for conditions like Alzheimer’s disease and cancer.
23andMe went public in June 2021, a few months before the Lemonaid deal closed, at $11.13 a share.
Since then, 23andMe’s stock price has tumbled due to a mass data breach and the resulting $30 million class action lawsuit. Now strapped for cash, the company cut 40% of its staff in November, or about 200 people, and shut down its drug discovery efforts.
In September, the company was trading at $.35 a share. The following month, 23andMe completed a reverse stock split, exchanging every 20 shares of its stock for one share to prevent it from being forced to delist from the Nasdaq. As of January 17, it’s worth about $3.60 a share.
Three-quarters of Lemonaid’s $400 million acquisition was paid as shares of 23andMe stock. 23andMe was valued at $3.5 billion when the company went public in 2021. Today, it’s valued at about $91 million.
23andMe’s nosedive
In 2023, 23andMe confirmed that ancestry data for nearly 7 million users was accessed and compromised. The data — including birth details and names — was sold on the dark web by hackers.
A data breach notification filing in January 2024 indicated that 23andMe took five months to realize the data had been accessed. This led to a class action lawsuit, which 23andMe settled for $30 million in September 2024, according to Reuters.
Alongside the challenges the company faced with the data breach, CEO Anne Wojcicki also proposed taking the company private in a July 2024 SEC filing. Five days later, that bid was rejected by a special committee assembled by 23andMe’s board of directors.
Then, in September, the company said in a separate SEC filing that Wojcicki was open to the possibility of a third-party takeover. Shortly after, 23andMe’s entire board of directors resigned.
Wojcicki walked back the remarks in a separate filing, and a 23andMe spokesperson told Business Insider in January that Wojcicki is no longer open to considering a third-party buyout. Wojcicki still intends to take 23andMe private, the spokesperson said at the time.
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