23andMe raises $250m in financing, research points towards its future

23andMe made two announcements on the same day that point towards the future of its business: it revealed it had raised $250 million in financing and released details from a long-running study into Parkinson’s disease.

The company earned backers from Sequoia Capital, a Silicon Valley-based venture capital firm that had previously backed Google and Airbnb, as well as Euclidean Capital, Altimeter Capital and the Wallenberg Foundation.

The press release to accompany the news stated that: "The financing will enable 23andMe to accelerate customer growth, continue funding its expanding therapeutics group, and invest in its crowdsourced genetic research platform, already the world's largest interactive database for genetic research."

The key behind how the company is set to grow came in another press release that was also announced by 23andMe, alongside researchers from Genentech, that it had identified 17 new genetic variants associated with Parkinson’s disease.

23andMe ostensibly sells consumer-directed genetic testing kits, which provide purchasers with information on their DNA – including likely heritage and, due to recent FDA approval, risk factors for select rare diseases.

The collection of consumer DNA profile is managed through an opt-in process when customers sign up for results from the testing. If they choose to allow their data to be used, and 23andMe suggests 85% of customers consent to this, the company can then market the data to be used on a drug discovery or licensing basis with pharmaceutical companies.

In this particular case, 23andMe had partnered with Genentech to study Parkinson’s genetic risk factors. The study lasted more than two years and involved data from a data set that surpassed 425,000 individuals. The draw for pharma partners is that they can gain access to insights that could potentially provide clues or targets for new kinds of treatments in disease areas.

This is why there is substantial investor interest in the company, as it adds to its genetic database through the consumer-model then it becomes more valuable to potential pharma collaborators.

"23andMe is primed for growth with the only FDA authorisations for direct-to-consumer genetic tests, and a world-class research platform powered by engaged customers," said Roelof Botha of Sequoia Capital. "The scale of the data - millions of customers and growing - and the unique combination of genotypic and phenotypic information provides an unrivalled research platform for insights into human health. With its distinctive and compelling consumer value proposition, 23andMe is poised to cement its leadership position in the consumer genetics market."