23andMe is going public as it pushes further into healthcare
It's merging with a Virgin company to make the deal happen.
Home DNA tests haven’t been as helpful to 23andMe’s bottom line as the company might like, but it could soon have the resources for more ambitious efforts. The genetics firm is becoming a publicly-traded company through a merger with Virgin’s VG Acquisition. The deal values 23andMe at about $3.5 billion and should give the company the finances it wants to boost its personal healthcare and therapeutics plans. It should have over $900 million in cash, for instance.
The merger is expected to close in the second quarter of 2021 and will have private $25 million investments from both 23andMe chief Anne Wojcicki and Virgin’s Sir Richard Branson.
While 23andMe didn’t say much about how its strategy might change by going public, it was keen to promote its contributions to genetic research and its involvement in therapeutic programs for conditions like cardiovascular disease and respiratory issues. As Sir Branson suggested, the public offering could help 23andMe “revolutionize” personalized medicine.
The move could pose a challenge. As a public company, 23andMe will have to deliver value to shareholders to justify its existence — and that means genetics services that turn a healthy profit. It might also have to reassure investors that it has addressed DNA testing privacy concerns, such as police requests. There’s a lot of potential, though, and this might give 23andMe an edge over competitors that won’t have the same financial clout.
