23andMe is said to be in talks to go public through Branson’s SPAC

Photographer: Cayce Clifford / Bloomberg

Consumer DNA testing company 23andMe Inc. in talks to go public through a deal of about $ 4 billion VG Acquisition Corp., a special purpose construction company founded by Richard Branson, according to people familiar with the matter.

A contract could be announced in the coming weeks if negotiations are successful, said the people, who asked not to be identified as the information was private. Conversations could still fall apart, the people said.

In 2018, 23andMe was valued at $ 2.5 billion, said individuals familiar with the matter. A merger with a special purpose construction company, or SPAC would allow 23andMe to go public without the risk or uncertainty of holding an original public offering.

Shares of VG Acquisition jumped as much as 18.4% before being temporarily halted in New York trading on Wednesday. They traded up 3% to $ 14.01 apiece at 11:55 am

Representatives for 23andMe and VG Acquisition declined to comment.

Read more: New 23andMe tool assesses risk of Covid-19 pregnancy

Co-founded in 2006 by Anne Wojcicki, 23andMe sells direct-to-consumer genetic testing equipment. The company launched with the goal of using genetics to embark on a personalized version of healthcare, with a $ 1,000 trial that could warn customers about potential health risks. .

It had to withdraw the product from the market with the Food and Drug Administration, pivoting to a genealogy test and then re-launching a health care test after receiving group approval.

On Wednesday, the company has launched a COVID-19 intensity calculator, which measures a person’s risk of being hospitalized due to the virus.

23andMe has raised $ 869 million in private funding to date and counts GlaxoSmithKline Plc, Sequoia Capital and Loyalty Management among the supporters. The company it cut jobs in early 2020 when the industry once underwent a genetic test to delay consumer concerns about privacy.

Rival Ancestry.com Inc. cut. jobs last year after two years of rapid growth. Blackstone Group Inc. in December he bought a majority stake in Ancestry valued at $ 4.7 billion.

VG Acquisition raised $ 509 million through an initial public offering in October. Although founded by Branson, he is not a director of the company. The blank check company plans to find targets that will work in consumer-facing industries in the U.S. and western Europe, according to the forecast.

– Supported by Katie Roof, Gillian Tan, and Priya Anand

(Updates with sections in the fourth paragraph.)