23andMe Reportedly Considering Selling Lemonaid Telehealth Unit

23andMe is reportedly considering selling the Lemonade Healthits telehealth operation.

The consumer genetic testing kit company acquired Lemonaid in 2021 for the $400 million and now EVALUATION a sale, EVERY a Friday (Jan. 17) Business Insider report citing sources familiar with the matter.

PYMNTS reached out to 23andMe for comment but has not yet received a response.

The news comes months after 23andMe announced it was being cut more than 200 jobs – or almost 40% of its staff – as part of a larger restructuring.

The company’s stock has fallen since a 2023 data breach which exposed the private information of nearly 7 million customers. 23andMe disclosed the breach in October 2023, about six months after it began, with the incident affecting nearly half of the company’s database users. at that time.

Last September, 23andMe announced it had agreed pay $30 million to settle all claims related to infringement.

As sales of DNA test kits decline, Ancestry.com says so the idea of ​​it 23AndMe claims — its closest competitor — COME probably not bearing fruit because of antitrust concerns.

“23andMe is particularly challenging because they’re No. 2 in the category, and we’re No. 1 in the category,” Ancestry Chief Legal Officer Greg Packer said during a meeting last fall, according to a report in Bloomberg News.

He noted that the Federal Trade Commission (FTC) is likely to consider the merger As possibly monopolistic. As rivals in the highly consolidated consumer DNA testing market, Ancestry and 23andMe are uniquely positioned at the top of the sector, which is getting stronger the antitrust complexities surrounding a possible acquisition.

This latest news comes amid a “Pivotal moment” for digital healthcareas PYMNTS wrote last week, “with innovation, funding and expansion creates new opportunities and challenges for startups and established companies.

Venture funding for the sector reached $10.1 billion last year. That’s a slight decrease from 2023, though more than pre-pandemic investments. However, a drop in late-stage funding reveals that larger companies have more trouble securing capital, which could lead to mergers and acquisitions, the report added.

“Many late-stage players have spent significant capital to develop and pilot their solutions but have not been able to clear the necessary hurdles to operate sustainably at scale,” Lawrence M. Chuco-chair of Global M&A at Goodwin, Rock Health’s said 2024 Digital Health Care Report released last week.

“The current decline in late-stage investments is likely to lead to more M&A in the near future. These acquisitions may not be ‘champagne popping’ events, but they will streamline operations and free up founders. to ultimately start a new crop of digital health companies.”