23andMe Secures $115 Million in Series E Extension at $1.1 Billion Valuation

Although the FDA halted 23andMe’s ultra-low-cost direct-to-consumer personal genetic reporting service two years ago, 23andMe remains one of the most active and closely watched startups in the field of personalized medicine. Following its $79 million Series E funding round launched in July, 23andMe continued to seek additional capital. On October 14, 23andMe announced it had secured $115 million in new financing, led by Fidelity, with participation from Google, Casdin, and WuXi AppTec. At this time, 23andMe’s valuation reached $1.1 billion, making it the highest-valued startup in the personal genetic testing sector.

23andMe’s major historical investors include Google Ventures, which participated from Series A through Series E; New Enterprise Associates, which took part in the Series A, C, and D rounds; and Johnson & Johnson, which led two Series C financing rounds. Investors view 23andMe as a rare company in the gene sequencing sector capable of serving both consumer (C-end) and business (B-end) markets. Notably, this latest funding round features the participation of WuXi AppTec, with 23andMe stating that it will leverage this partnership to enter the Chinese market in the future.

23andMe, founded in 2006, has been in operation for nearly a decade. The company has raised more than $300 million in total funding.



It is evident from the financing history that 23andMe experienced a downturn after the FDA halted its direct-to-consumer low-cost genetic reports in November 2013. As its consumer-facing (2C) model for affordable genetic testing was constrained by regulatory policies, 23andMe temporarily sought growth in the business-to-business (2B) sector by providing genetic data services to support pharmaceutical R&D. However, this approach clearly offered far less growth potential than the 2C model. This has indeed been the case: despite securing numerous contracts with pharmaceutical companies, 23andMe has not achieved profitability from 2006 to the present.

It was not until March 23, 2015, that 23andMe announced it would leverage its years of accumulated genetic data to independently develop pharmaceuticals. To this end, 23andMe hired Richard Scheller, former Vice President of Genentech, and began raising capital in accordance with its new strategic plan. Finally unable to contain the grand ambitions it had harbored from the outset, 23andMe resurfaced after a circuitous journey. Its past close collaborations with other pharmaceutical companies on R&D processes proved to be valuable experience for its successful relaunch. Precisely due to this strategic transformation, 23andMe secured two major investment rounds this year, totaling more than $200 million.

In February, following prolonged controversy and public review, the FDA approved 23andMe’s genetic testing service for Bloom syndrome. 23andMe will proceed to upgrade this product and return to the market by the end of this year. Supported by a new round of financing, 23andMe will accelerate the development of new products as well as its drug development business. The company is currently establishing therapeutic research laboratories and sequencing laboratories.