After a year of financial struggles, consumer genomics company 23andMe raised just under $82.5 million in equity funding, according to SEC filings. Veteran health tech investors Sequoia Capital and NewView Capital participated in this latest round, according to the Wall Street Journal.
Historically, 23andMe has had a number of large investments, including a $300 million investment from pharma giant GSK in 2018; a $250 million round in 2017, which was led by Sequoia; and a $79 million round in 2015.
WHAT IT DOES
23andMe is a direct-to-consumer service, which provides insights to users about their DNA. The company has both ancestry services and health insights. Its products can help users understand their health predispositions and carrier status and give wellness reports.
The company is also heavily involved with research. For example, in 2019 the company teamed up with the Michael J. Fox Foundation for Parkinson’s Research. Additionally, the GSK investment deal came with exclusive access to 23andMe’s DNA database.
While the company is associated with health today, its journey into the space was not always smooth. In November 2013, the FDA ordered 23andme to immediately stop selling its genetic testing service until the offering received a de novo clearance. But the consumer genomics giant worked with the agency and in April 2017 received the nod to sell its direct-to-consumer genetic test kits that provide information about a person’s risk for certain diseases like Alzheimer’s or Parkinson’s.
WHAT IT’S FOR
The company has not yet specified with the new funds will be used for.
THE LARGER TREND
Over the last year we’ve seen the well-known health tech company struggle. In January of 2020 the company laid off 100 employees across its consumer business as a result of disappointing sales numbers. At the time, CEO Anne Wojcicki told CNBC the industry was seeing a market cool down, and customer’s privacy concerns were a major factor.
Last year, the company also faced a lawsuit from former business partner Celmatix, which sued the larger company for $100 million in damages. The suit centers on a reproductive health research contract signed by the companies in 2015.
While 2020 was a rough year for 23andMe, it did land a 510(k) clearance from the FDA that allows its direct-to-consumer personal pharmacogenetics report to guide use of two treatments without the need for confirmatory testing.