Genetics testing giant 23andMe is officially going public.
The company announced on Thursday that this new offering comes courtesy of a merger between 23andMe and VG Acquisition Corp: a “special purpose acquisition company, or SPAC, set up by noted billionaire Richard Branson. Per 23andMe’s announcement, the company’s cash balance at the end of the day will rocket past $900 million–and these investments are expected to bring 23andMe’s valuation to roughly $3.5 billion, a billion more than it was reportedly being worth in 2020.
In spite of that valuation, the start of 2020 was relatively rough on 23andMe. The company kicked off the year by laying off 100 employees—14% of its total workforce—after sales of at-home DNA testing kits took a tumble across the board. That said, the company managed to turn its fortunes around by the year’s end, securing close to $83 million dollars in its most recent funding round.
23andMe is hardly the first company to go public via the SPAC route. Because the ongoing pandemic brought on its fair share of rocky market conditions, 2020 saw a surge of companies eschewing the traditional IPO in favor of merging with SPAC’s, since it’s generally a far quicker path to getting on the market—think about three months instead of a year or more.
Branson has plenty of experience with SPAC’s too. Back in 2019, his spaceflight company Virgin Galactic went public thanks to one of these merger deals. Earlier this year, he hinted that Virgin’s satellite subsidiary—Virgin Orbit—might soon be pursuing a space-SPAC deal of its own.