Private equity firm Blackstone is set to acquire a majority share of consumer-genomics company Ancestry for $4.7 billion.
The firm, which is currently owned by other investors, including Silver Lake, GIC, Spectrum Equity and Permia, got its start using genomics to tell customers about their heritage. However, it has recently shifted to also incorporate health information.
After the deal is completed, GIC will continue to hold a stake in the company as well.
According to a Blackstone release, Ancestry has $1 billion in annual revenue and 3 million paying customers.
“We believe Ancestry has significant runway for further growth as people of all ages and backgrounds become increasingly interested in learning more about their family histories and themselves,” David Kestnbaum, a senior managing director at Blackstone, said in a statement. "We look forward to investing behind further data, functionality, and product development across Ancestry’s market leading platform to continue to provide a differentiated service. Our investment is a prime example of Blackstone’s continued, high-conviction focus on investing in growing, digital consumer businesses, which are resilient in the current environment and beyond.”
WHY IT MATTERS
Ancestry is becoming a larger player in the digital health world. In the fall the company announced its plans to launch AncestryHealth. At the time it rolled out its first two offerings, AncestryHealthCore and AncestryHealthPlus.
Just this week, it added a new product that will focus on next-generation genomic sequencing. The new product is very much in the world of healthcare, and it promises to screen for genes associated with a number of conditions, including breast cancer, heart disease, colon cancer and blood disorders.
THE LARGER TREND
The consumer-genomics space has had a rocky road since January, when 23andMe, widely considered a front-runner in the space, laid off 100 employees, siting a slowing demand for the services. Ancestry shortly followed its competitor’s lead, and also laid off roughly 100 people.
Also, 23andMe’s CEO Anne Wojcicki sited some of the difficulties regarding consumer-privacy concerns. Historically, consumer-genomics companies have had a difficult time winning public trust. Even the Senate has become involved in the debate.
In 2017, Sen. Chuck Schumer (D-N.Y.) called on the Federal Trade Commission to investigate and ensure privacy policies are clear when it comes to consumer genomics. In June of 2019, Sens. Amy Klobuchar (D-Minn.) and Lisa Murkowski (R-Alaska) introduced legislation to strengthen privacy and security around consumer personal-health data.