A blank-check firm, backed by Virgin Group founder Sir Richard Branson, is taking consumer DNA-testing firm 23andMe public in a deal that values the merged entity at $3.5 billion, the companies said on Thursday. Anne Wojcicki, 23andMe CEO and co-founder, speaks with CNBC's Meg Tirrell about the decision. To see the full interview with Wojcicki and Branson on going public sign up for a free trial to CNBC Pro: https://cnb.cx/2MRBWSe
A blank-check firm, backed by Virgin Group founder Sir Richard Branson, is taking consumer DNA-testing firm 23andMe public in a deal that values the merged entity at $3.5 billion, the companies said on Thursday.
As part of the deal with VG Acquisition, 23andMe will receive proceeds of $759 million, which includes $250 million from a range of investors including Branson, 23andMe co-founder Anne Wojcicki, funds managed by Fidelity Management & Research Co, Altimeter Capital, Casdin Capital and Foresite Capital.
Billionaire Branson, a serial entrepreneur whose space tourism company Virgin Galactic went public through a deal with prolific blank-check investor Chamath Palihapitiya’s special purpose acquisition company (SPAC) in 2019, is the latest celebrity to join the blank-check dealmaking frenzy.
A SPAC, or a blank-check firm, is a shell company that raises funds in an initial public offering (IPO) with the aim of acquiring a private company, which then becomes public as result of the merger.
For the company being acquired, the merger is an alternative way to go public over a traditional IPO. SPACs emerged last year as one of the most popular investment vehicles on the Wall Street.
NBA Hall of Famer Shaquille O’Neal, high-profile politicians including former U.S. Commerce Secretary Wilbur Ross, former Republican House Speaker Paul Ryan and hedge fund bosses Dan Loeb and Bill Ackman are also looking to strike deals through their SPACs.
23andMe, which was co-founded by Wojcicki in 2006, sells genetic testing kits directly to consumers. Over the years, 23andMe has become popular with consumers, and in 2018 caught the eye of GlaxoSmithKline, which invested $300 million in the Silicon Valley company, best known for its saliva-based test kits that offer users a glimpse into their genetic ancestry.
The merged entity will trade under the symbol “ME” on the New York Stock Exchange.
I have to ask you, you know, one of the last times I think we saw each other in person
was at this conference in Las Vegas, the health conference.
I asked you if you'd ever, if you were considering an IPO and at the time, granted this was more
than two years ago, you said it sounded miserable to be a public company CEO.
You said there's a time and a place when you're steady and growing.
So are you at that time and place?
I mean, why go public now?
Why through a SPAC?
Just tell us.
It's, it's a great question and I, it's, you're not the first to ask.
I think I've been really convincing about the fact that we were going to stay private
for a long time.
And we did, we did stay private for a long time.
And frankly, we were private while we built really this infrastructure that I felt like
is so important for us to execute on all the things we want to do, like really be able
to take on, on therapeutics, really be able to take off on the consumer vision.
So what happened now is there's the maturity within the company.
There's an establishment with our customers about how we operate.
There's an establishment with our investors about what the mission of the company is and
how we always put our customers first.
And so now we're really at a point in time where I'm, I'm ready to, you know, explode.
Like there's huge opportunities on therapeutics and huge opportunities for our consumer business.
And let's, you know, go back to Joe's question.
I mean, this privacy question has been one that you have always had really as the forefront
of your considerations in business.
I mean, how are you looking at that and questions that consumers might have about their privacy
on health or what they might discover?
For me, privacy has always been about choice and transparency.
So the most critical component of 23andMe is that we give our customers the ability
to have a choice to get their genetic information and a choice to learn about additional relatives
and a choice to learn about additional health information.
And then we're transparent about, do you want to opt into research?
We have a phenomenal collaboration with GSK, really trying to move this information forward
to make therapeutics that are going to be personalized that will really cure disease.
So the tenets for me on privacy have always been about choice and transparency.
And you know, we're just about out of time, but I have to ask, are we going to see new
things from 23andMe?
What's next for growth for you?
Oh, I think we're really just about to take off.
I think that's what is just so exciting here is the, you know, the therapeutics team came
to me, you know, last year and just said, we are exceeding expectations.
It's just taking off.
So there's a huge opportunity there.
And then on the consumer side, we're at this sudden point because of COVID where there's
a whole world that's coming of virtual care.
And how is it that we can help our customers really think about prevention?
Like think about COVID has taught us the importance of prevention and what the human genome gives
you is this information about what your risks are.
And now what we're going to be able to do is give you more and more of those tools.
How do you help keep our customers healthier?
We found over 75% of our customers were already taking actions, trying to be healthier.
And so the next era for us is about using your genetic information to benefit from the
human genome and actually have a healthier, longer life.
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