23andMe Inc (NYSE:ME), which sells home DNA testing kits and sells the rights to drug developers, is joining the IPO frenzy by reversing into a cash-rich shell company backed by Sir Richard Branson.
As part of the merger with VG Acquisition Corp (NYSE:VGAC), a special purpose acquisition company (SPAC) founded by Branson, the DNA testing company will raise US$759mln.
This includes US$250mln from a range of new investors, including US$25mln from billionaire Branson himself, along with 23andMe co-founder Anne Wojcicki and institutional investors Fidelity, Altimeter Capital, Casdin Capital and Foresite Capital.
23andMe, which will trade under the ticker ME, will have a pro forma cash balance topping US$900mln.
The Silicon Valley-based company, co-founded by Wojcicki in 2006, has sold its testing kits directly to millions of consumers, who send back a sample of their saliva to be DNA screened for genes associated with certain inherited conditions and other genetic markers telling them where their ancestors came from.
Customers’ data is anonymised and stored under encryption on its servers, the company says, though people can ask to remove it from the servers entirely, or tick a box to share their data with their family and their doctor, as well as with researchers and drug companies, which has led to various ethical objections.
Previous backers include GlaxoSmithKline PLC (LON:GSK), which invested US$300mln in 2018 as part of an exclusive four-year collaboration to focus on research and development of innovative new medicines and potential cures, using human genetics as the basis for discovery.