23andMe, the DNA testing startup famous for its at-home kits, has raised $82.5 million in equity funding, Business Insider has learned.
The 14-year-old company cofounded by Anne Wojcicki plans to raise $85 million in total, according to a Form D filing with the US Securities and Exchange Commission dated December 23.
The filing stated that 23 unidentified investors have already committed funding for the round, with roughly $2.5 million in available shares yet to be sold. When reached for comment, a 23andMe representative confirmed Sequoia Capital and NewView Capital co-led the financing round.
The company raised $300 million in July 2018, and has since completed two separate confidential fundraises according to Pitchbook data. It was most recently valued at $2.5 billion, and says on its website that it has raised $791 million.
Representatives for 23andMe confirmed the financing round's lead investors and declined to comment further.
The raise comes at the end of a tumultuous year for the testing company, which laid off workers in January as the DNA testing business slowed. In August, it got clearance from the Food and Drug Administration to recommend certain drugs to patients based on their genetics.
The company has struggled to maintain its dominance in the at-home DNA testing market after companies like Ancestry.com introduced competing tests and consumers became bored of the genetic testing fad. It has also faced consumer data privacy and ethics concerns throughout the past several years.
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Private equity firm Blackstone acquired Ancestry in a $4.7 billion deal that closed on December 4. The deal raised eyebrows among some privacy advocates who were concerned about the investment firm's potential access to Ancestry's user data, which includes sensitive health information, CBS News reported.
DNA testing companies have had a turbulent year
2020 began with layoffs at 23andMe and its main competitor Ancestry, Business Insider's Lydia Ramsey Pflanzer reported previously, amid widespread concerns that the consumer genetics testing fad was ebbing.
Both companies laid off roughly 100 employees, representing 14% of 23andMe's workforce and 6% of Ancestry's workforce.
The first warning sign of a slump came in July 2019 with a disappointing earnings call from Illumina, a genetics giant that makes the technology to read consumers' genes. It noted "softness" in the market, and said its business segment saw sales slump 12% last year. Within that segment, tests like those from Ancestry and 23andMe made up 50% of revenue in 2018 and 40% in 2019.
By January, 23andMe's layoffs reflected Illumina's warnings, with the majority concentrated in its sales and business divisions that were not part of its core home testing kit product or its therapeutics division. That division mainly focuses on developing therapeutics based on the information it collects, Ramsey Pflanzer reported in 2017.
"The business model has definitely evolved," Wojcicki said in an October 2019 interview. "Because it was very much about one and done, and we still see a lot of our customers as being super engaged."
