23andMe, the US-based genetic testing service backed by corporates Alphabet, WuXi AppTec, Johnson & Johnson, GlaxoSmithKline (GSK), Roche and Illumina, agreed a reverse merger with a special purpose acquisition company (SPAC) yesterday.
VG Acquisition Corp, which is sponsored by conglomerate Virgin Group, floated on the New York Stock Exchange in a $480m initial public offering in October 2020, and the merged business will take its listing on the exchange.
The transaction will value the company at $3.5bn and will be supported by $500m in financing from Virgin founder Richard Branson, 23andMe co-founder and CEO Anne Wojcicki, funds managed by investment and financial services group Fidelity, Altimeter Capital, Casdin Capital and Foresite Capital.
Founded in 2006, 23andme provides home testing kits that customers send back in order to get information on genealogy and/or their potential genetic susceptibility to certain diseases.
The information also supports genetic research carried out by the company, which had raised a total of $873m as of an $82.5m series F round co-led by Sequoia Capital and NewView Capital last month, 18 months after a $300m investment by GSK.
The GSK deal came after a $250m round in 2017 led by Sequoia Capital and backed by investment and financial services group Fidelity, Euclidean Capital, Wallenberg Foundation, Altimeter Capital and Casdin Capital, valuing it at $1.75bn post-money.
Fidelity led 23andme’s $115m series E round in 2015, investing with internet technology group Alphabet’s GV subsidiary, genomics technology provider Illumina, pharmaceutical firm WuXi AppTec’s WuXi Healthcare Ventures unit, Casdin Capital, Xfund, New Enterprise Associates (NEA) and MPM Capital.
The series E reportedly valued 23andme at $1.1bn and came after it closed a $57.9m series D round in 2012 that included GV, MPM Capital, NEA, Anne Wojcicki and private investor Sergey Brin.
The company had secured $31m in a 2011 series C round featuring pharmaceutical company Roche’s Venture Fund, peer Johnson & Johnson’s Johnson & Johnson Development Corporation – JJDC unit, MPM Capital and NEA.
GV and NEA participated in the 2011 round as existing investors, the company’s earlier backers also including Genentech, a biotech researcher later acquired by Roche, as well as NEA and Mohr Davidow Ventures.
Richard Branson, founder of Virgin Group, said: “Of the hundreds of companies we reviewed for our SPAC, 23andMe stands head and shoulders above the rest.
“As an early investor, I have seen 23andMe develop into a company with enormous growth potential. Driven by Anne’s vision to empower consumers, and with our support, I am excited to see 23andMe make a positive difference to many more people’s lives.”
Citi is lead financial adviser, capital markets adviser and placement agent for 23andMe, which has retained Morgan, Lewis & Bockius as legal counsel.
VG Acquisition Corp hired Credit Suisse as lead financial adviser, capital markets adviser and placement agent while LionTree Advisors is financial adviser for VG on the deal and Davis Polk & Wardwell legal counsel.
