Genetic testing company 23andMe is going public through a SPAC backed by Richard Branson

Domestic DNA testing company 23andMe will go public through a special-purpose acquisition company (SPAC) backed by Virgin Group founder Richard Branson, the companies announced on Thursday.

“We always believe that health needs to be driven by the consumer and we have a great opportunity to help personalize the entire experience at scale, allowing individuals to be more proactive about their health and well-being,” 23andMe CEO and co-founder Anne Wojcicki said in a statement.

The deal values ​​the company at $ 3.5 billion, and current shareholders will own 81 percent of the company. Wojcicki and Branson each invested $ 25 million as part of the $ 250 million fund formed to go public. The deal is expected to close in the second quarter, when the company will begin trading on the New York Stock Exchange under the symbol ME.

SPACs, which grew in popularity in 2020, are formed by groups of investors with the intention of acquiring a company. Also known as a “blank check” company, a SPAC is seen as a less risky option than the traditional IPO and gives younger companies access to capital amounts from companies at an advanced stage.

Launched in 2006, 23andMe sells saliva kits that people can use at home to determine their genetic ancestry and their chances of developing certain diseases. The company has an estimated 10 million customers in its database and says that more than 80% of customers agree to participate in medical research.

Wojcicki said on Thursday that the funds will allow the company to expand into the development of therapeutic products, seen as a more profitable market than DNA testing for consumers, according to The Wall Street Journal. A slide show announcing the business showed that the company sees great growth potential in the therapeutic market.

23andMe

Some blame the drop in popularity of domestic DNA testing for privacy reasons, including reports that the FBI used genetic results from consumer DNA company databases to solve archived crimes. 23andMe and other companies have promised not to share customer data without consent.

Wojcicki acknowledged a slowdown in the domestic DNA testing market on Thursday. “We have always seen health as a much bigger opportunity” than DNA ancestry, she told WSJ.

Branson, one of 23andMe’s first investors, said on Thursday that “there is no better money to invest than in health”.