Popular consumer DNA-testing company 23andMe announced Thursday that it has entered into a deal to merge with VG Acquisition Corp., a special purpose acquisition company founded by billionaire Sir Richard Branson. This news comes less than two months after 23andMe raised $82.5 million in fresh funding, and makes the Sunnyvale-based company the latest to go public via SPAC merger.
SPAC deals like this one have become a popular way for businesses to go public recently, mainly because they allow companies to earn more funding faster without the uncertainty of an initial public offering. Other companies like Fisker and Hims & Hers have elected to take this route in just the last couple of months as well.
As for 23andMe, this agreement values the 15-year-old company at about $3.5 billion, according to the company, with 23andMe CEO Anne Wojcicki and Branson each investing $25 million into a $250 million private investment in public equity (PIPE) offering. The deal is expected to be completed in the second quarter of 2021.
Wojcicki says this latest deal with VG Acquisition Corp. will allow 23andMe to further “revolutionize personalized healthcare and medicine.”
“We have always believed that healthcare needs to be driven by the consumer,” Wojcicki said in a statement. “We have a huge opportunity to help personalize the entire experience at scale, allowing individuals to be more proactive about their health and wellness. Through a genetics-based approach, we fundamentally believe we can transform the continuum of care.”
Co-founded by Wojcicki in 2006, 23andMe was one of the first companies to roll out at-home genetic testing kits for the general population to figure out more about their DNA and what it means for their health, traits and ancestry. It also claims to be the only consumer genetic testing company to have multiple Food and Drug Administration clearances for its over-the-counter health and carrier status reports.
More recently, 23andMe has taken the genetic information of consenting participants to create a massive genomic data store that can be used for the discovery of future treatments and therapies. The company claims that, to date, it has helped generate more than 30 therapeutic programs in areas like oncology and cardiovascular diseases.
Then, when the COVID-19 pandemic began, 23andMe conducted a million-person study to analyze how genetics contribute to the severity of one’s coronavirus symptoms. The company also launched a COVID-19 Severity Calculator to help users figure out their potential risk of being hospitalized due to the virus.
This kind of innovative thinking when it comes to public health, Branson said, places 23andMe “heads and shoulders above the rest,” and was the reason VG Acquisition Corp. decided to merge with the company.
“As an early investor, I have seen 23andMe develop into a company with enormous growth potential,” Branson said in a statement. “Driven by Anne’s vision to empower consumers, and with our support, I’m excited to see 23andMe make positive differences to more people’s lives.”
