Since the pandemic, 23andMe, the DNA-testing company, has seen layoffs, slow growth, and decreased revenue. With its public debut, the company hopes the renewed interest in healthcare — brought on by the pandemic — will translate into profit.
In February, 23andMe announced it was merging with Richard Branson’s special acquisition company (SPAC), VG Acquisition, which would set 23andMe’s valuation at $3.5 billion. 23andMe is getting an extra influx of cash via a $250 million private investment in public equity offering, including $25 million from Branson himself and a matching contribution from co-founder and CEO Anne Wojcicki. According to our data, job listings have risen sharply while company headcount is steadily increasing, indicating that the company is in the midst of an expansion tied to its recent funding and SPAC deal.
According to a recent regulatory filing, 23andMe’s revenue has been declining. In the fiscal year ending in March 2020, the company reported $305 million in revenue, a decrease from the $441 million it made the previous year. From March 2020 up until December, the company saw a further decrease, down to $155 million. Meanwhile, the company reported net losses of $250 million during that time.
The company likely chose a public debut via SPAC because the method tends to eliminate uncertainty associated with an IPO or direct listing. SPACs have become increasingly popular among startups — in March alone, there were over 100 SPAC deals. April, however, has only seen 10, likely because of recent SEC guidance cautioning investors against the deals due to concerns about reliability.
23andMe, which sells genetic testing kits, has had difficulty keeping consumers interested. One early product, a $1,000 at-home testing kit, was pulled due to regulatory issues, leading the company to pivot to ancestry testing. While their kits were initially a huge success, the company saw a decrease in demand for its product as skeptical consumers felt privacy was more important than handing over data in the form of genetic information.
Rivals like Ancestry.com faced a similar loss in demand and downsized as a result. Now, after laying off workers in the early months of the pandemic, 23andMe is pivoting again to create genetic therapies using data from its 12 million customers.
Branson, who was an early investor in the company, told Bloomberg that the company is “absolutely transforming drug discovery.”
As of March 17, 23andMe had 17 job listings open, an increase of 69.5% quarter-over-quarter, according to our data. Hiring apparently increased in late January after a slower increase throughout the pandemic.
According to our data, 23andMe’s employee headcount currently sits at 661, up from a year-to-date low of 635 in October 2020. As the company steps up hiring, its headcount has steadily ticked up. Despite the increase, it’s a far cry from the high of 766 employees back in November 2019.
Meanwhile, our data shows that App Store ratings for the company have steadily increased during the past year, indicating that new users are coming to the app much like they were pre-pandemic. Ratings sit at 317,000, a 44% increase from this time last year.
The deal, which was announced in February, came at the height of SPAC popularity, but as it comes nearer to closing, not only is there less investor faith in SPACs, but 23andMe will have to prove that its expansion outside of consumer DNA testing is a profitable one.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.