Cutbacks by Ancestry, 23andMe signal a shakeout for DNA-testing industry
- At least three companies have closed down or suspended their operations over the past year
- Others have pulled tests from the market because of slow sales
Consumer DNA-testing firms are closing up shop and cutting jobs, as a lull in sales forces the industry to move beyond the genealogy tests that turned a handful of well-funded companies into household names.
At least three companies have closed down or suspended their operations over the past year, while the two DNA-testing bellwethers, Ancestry.com and 23andMe, each cut around 100 jobs in recent weeks. Others have pulled tests from the market because of slow sales.
A seemingly insatiable appetite for discovering the secrets of the human genome made home-testing kits runaway hits. Ancestry gained more than 10 million users between 2017 and 2019, after growing to just five million in the five previous years combined. Rival 23andMe saw its sales quintuple in two years, from two million customers in 2017 to more than 10 million last year.
Those gains represent a near-term peak for an industry that attracted billions of dollars in private investment and spent lavishly on marketing and advertising. The biggest players are now retrenching as they try to deliver on a long-promised personalised health revolution, while those not big or well-funded enough to endure the slowdown are struggling.
“Genetics still are not as mainstream as people would like to believe that they are,” said Clayton Lewis, who co-founded and was chief executive of Arivale, a wellness-testing company that he said raised more than US$55 million from investors including ARCH Venture Partners, but closed in April because of sluggish sales. Arivale, founded in 2014, provided people with genetic insights into diet and other issues and was a partner in a DNA “app store” envisioned by Helix, a company backed by genome-sequencing giant Illumina.