23andMe Raises $80 Million Of Its Planned $150 Million Funding Round

image

Consumer-facing genome sequencing firm 23andMe sheds some light on its latest fundraising efforts. The Palo Alto-based company recently filed regulatory paperwork indicating that it has raised $80 million of a planned $150 million funding round. Fundraising efforts will continue for the foreseeable future as the company works to close out the round. Individual investors were not disclosed in the funding round, but 23andMe has raised north of $100 million thus far, excluding the current round, from investors like Google Ventures, New Enterprise Associates, Mohr Davidow Ventures, Yuri Milner, and Sergey Brin, ex-husband of 23andMe’s founder Anne Wojcicki.

The latest funding news is a positive sign for 23andMe, which has not closed a funding round since 2012. The company launched in 2006 with the goal of selling genome testing services to the general public to help people understand what inherited diseases they were at a higher risk of contracting. By 2012, 23andMe had raised $111 million in funding and was reporting growth in its business operations. But in 2013, the FDA shut down 23andMe’s genome testing business, claiming that despite having several years to comply with its requests, 23andMe had failed to provide evidence that the diseases it was telling consumers they were at a higher risk of developing were based on sound genetic science.

The company was put in the difficult position of having to pivot its business model with little notice. It began selling genome tests to people researching their family history, describing a person’s ancestors and genealogical origins. Next, the company monetized its extensive genetic database as a research tool for pharmaceutical companies, signing a $60 million deal with Genetech to research Parkinson’s disease. Now, 23andMe sees itself as a business-to-business enterprise, selling genetic research services to support drug development efforts. In March, renowned scientist and pharmaceutical executive Richard Scheller was hired on as the new chief science officer, where he is working to monetize the company’s genetics data by developing use cases for it as a tool in pharmaceutical research.

Eventually, the FDA softened its stance with 23andMe, approving its genetics testing services for “carrier screening tests,” which are tests that determine whether a healthy person is a carrier of genetic mutations that could be unknowingly passed on to their offspring in the form of dangerous inherited diseases. Though this is just a subset of the information 23andMe was originally offering, this is very much a regulatory victory in 23andMe’s ongoing war with the FDA.

Though it still does not have approval to resume sales of its original product, investors are apparently confident enough in its re-imagined business model to back it. With a $150 million Series E in the works, and new genome data coming in every day through its limited offerings, 23andMe could still scale to become a prominent example of a digital health success story.


Enjoy HIStalk Connect? Sign up for update alerts, or follow us at @HIStalkConnect.

↑ Back to top

Founding Sponsors

Platinum Sponsors