Recently, the IPO (Initial Public Offering) market has become interesting to a large number of completely new investors who have not even been participants in the stock market. There is one big reason — profitability. The average return after the lock-up period is 40.5%, which corresponds to 162% annual in dollars (excluding commissions and personal income tax). In this article we will discuss the key details of 23andMe IPO: is 23andMe publicly traded, the history of the company, when is the 23andMe IPO date, 23andMe IPO price and everything you should know to make a decision whether to invest in it or not.
23andMe became the herald of the genetic revolution. It’s difficult to tell from its name. No ‘gen’ or ‘rev’ roots in the name, however, the name directly reflects the business. 23 is the number of pairs of chromosomes in a wild-type human cell, which the company analyses to tell more about you. The core business of 23andMe is selling DNA tests directly to customers to find out your or your ancestors’ genetic predisposition to some illnesses. Let’s follow their long path to success from founding till 23andMe stock IPO date.
The company was founded in 2006 by Linda Avey, Paul Cusenza, and Anne Wojcicki. In 2007 they received their first $3.9 million investment from Google. It shouldn’t come as a surprise, keeping in mind Anne Wojcicki and Sergey Brin were married at the time.
In the following 3 years the company was abandoned by two founders: Cusenza in 2007 and Avey in 2009. Both left for other CEO positions. So Wojcicki became the sole remaining founder and CEO.
It seems that 23andMe didn’t have any troubles in attracting money from investors, because in the next 10 years they raised $230 million with the biggest injection from pharmaceutical company GlaxoSmithKline. They invested $300 million in 2018. Other investors include some prominent venture funds like Sequoia Capital, Johnson & Johnson, Richard Branson and Fidelity.
Although many people believe in the genetic revolution and are eager to sponsor further developments, for FDA and the government it poses a challenge because it’s a new field.
The Food and Drug Administration (FDA) is responsible for ensuring safety of consumer-facing drugs, medical products, and food products for people. When the company was founded they weren’t sure how to treat the company, but since 2010 the agency has considered genetic tests to be medical devices. Which seems reasonable, because 23andMe was sending a saliva-collecting toolkit. Therefore, 23andMe needed FDA approval to sell their products.
To get around these regulations, 23andMe was thinking about moving to a different country with less strict regulations to market from there. But later in 2015 they received the ability to market their tests domestically again so no transition needed to be made.
The partnership with GSK and their $300 million investment in 2018 gave the company the last push before asking themselves “when is 23andMe going public?” GSK is using test results from 23andMe to create new drugs and we’ll talk about the implications of this after looking at the details of 23andMe stock IPO.
Let’s look at 23andMe IPO date and price.
23andMe’s Public Listing Key Data and IPO Date
IPO Date: Jun 17, 2021
Stock price: $10
Valuation at IPO: $3.5 billion
CEO: Anne Wojcicki
Category: Healthcare Stocks
Method: via SPAC
2019-2021 has seen a big rise in the number of IPOs. 23andMe, with its over-a-decade history, stable traction and innovative product seemed a perfect candidate for the IPO process too.
However, the company chose not to go through the traditional IPO but rather via Special Purpose Acquisition Company (SPAC). It has all the features of an IPO but merging with an existing company actually saves a lot of money on underwriters’ commissions.
The SPAC chosen for 23andMe going public wasn’t ordinary too. Can you think of a person who is rich, fond of innovative technologies and recently literally launched an innovative product too? Not Musk this time! Richard Branson’s SPAC, VG Acquisition Corp., agreed to acquire 23andMe in June 2021.
The 23andMe IPO price was $10 per share which is typical for SPACs, and the 23andMe IPO date was chosen to be June 17. The combined company was renamed to 23andMe Holding Co. and began trading on the Nasdaq stock market under the ticker symbol “ME”.
The stock rose to $13.32 at the end of the day, which is +30% upside to the initial price.
6 months after 23andMe IPO 2021 and the stocks are down 35%…
So What About Investing In It?
The future is not so bright after the 23andMe IPO 2021. It has yet to find its perfect balance in marketing and operations. The company is now struggling with declining revenues and significant losses. Last year it had to cut 14% of employees and saw its revenue drop from $305 million in 2019 to $441 million in 2019, which is 30%. Though revenues are up 15% this year, the company posted a $59 million net loss, on revenues of $114 million, in the six months ending in September 2021. Losses are the consequence of a slow-down in sales during the second quarter in addition to big spending on research and development for 23andMe’s therapeutics business.
Nonetheless, we are on the verge of genetic revolution and 23andMe are at the roots of it. People are growing conscious about their health and genetic tests can make a difference in treatment. The company is working in two directions: partnerships with big pharma and providing them data to cure diseases, and the development of the therapeutics business. It’s easy to underestimate the potential of the company, especially after a 35% fall from 23andMe stock IPO date but it’s natural for a medical startup to face losses. It’s all about moving forward and doing important things, that’s in the genes of 23andMe. “23andMe was founded to revolutionize healthcare by empowering people with direct access to their DNA,” said Anne Wojcicki, CEO and Co-Founder of 23andMe.
Once genetic tests were popular, but trends come and go, when science and health stay.
Is 23andMe a public company?
Yes, the company became publicly traded on June 14, 2021. It went public via merger with Richard Branson’s Special Purpose Acquisition Company VG Acquisition Corp.
How much is 23andMe worth?
The company was valued at $3.5 billion at IPO but the current market cap is lower due to the stock decline. As of December 2, 2021 23andMe has a $3.07 billion market cap.
What is 23andMe’s business ?
23andMe sells personalized medicine and at-home genetic testing kit for the average price of $79. It has built the world’s largest crowdsourced platform for genetic research. The company is also selling data to big pharma companies for drug creation as well as developing their own therapeutics business.