23andMe is raising close to $200 million in a funding round led by Sequoia, multiple sources tell us. We’re also hearing that Fidelity is looking to participate.
We’ve heard for a while the personal genetics company was looking for more money to expand its genetics research arm and develop new products.
The added cash will also allow 23andMe to continue growing its revenue, without the pressure to IPO just yet. Typically companies won’t go public until at least a year after their last financing round, and usually a little longer. While we hear co-founder and CEO Anne Wojcicki is reluctant to IPO, that is the standard path for late-stage venture-backed companies, in order to provide liquidity to early investors and employees. It’s also possible that a big pharma or other company could try to buy 23andMe.
23andMe has been leaning more on its research efforts since it was stifled in 2013 after being ordered by the Food and Drug Administration to cease sales of its personal genomics test. The FDA said at the time the company didn’t meet FDA standards. 23andMe subsequently stopped selling genetic health information to new consumers and began looking for alternative sources of revenue.
Since then it has beefed up its medical research, hiring more scientists and partnering with genetics outfits to conduct high-level studies. Celmatix, a genetics company studying fertility is currently working with the company for a study on how certain genes affect women’s ability to get pregnant.
The FDA relieved the pressure somewhat in 2015, allowing for one genetics test for Bloom syndrome. Earlier this year, 23andMe got the green light from government regulators to supply those who take the spit-tube test with health risk reports for up to 10 diseases, including late-onset Alzheimer’s and Parkinson’s. According to at least one source, it is also seeking approval to add genetic information on breast cancer-related genes BRCA-1 and BRCA-2, putting Color Genomics in the cross hairs.
23andMe also competes with Ancestry.com, which has been expanding its genetic testing capabilities. Though, these tests stay in the genealogical realm.
We’ve reached out to Fidelity and Sequoia for comment. Sequoia has declined to comment.