23andMe wants to do more than inform you that you are genetically predisposed to hate cilantro.
On Friday, the DNA sequencing company announced its intentions to acquire Lemonaid Health. 23andMe said that it’s paying $400 million through a combination of cash and 23andMe shares. A definitive merger agreement has already been signed.
SF-based Lemonaid Health has built a digital health platform to address a range of ailments — from insomnia, to UTIs, depression, asthma and more. The Lemonaid platform allows people to connect with medical providers via telehealth appointments, as well as get prescription medications sent directly to their door.
These two offerings — both telehealth and e-commerce for prescriptions — exploded in demand during the Covid-19 pandemic. Now, people have gotten used to seeing their doctor via video call or getting their meds from a website instead of a brick-and-mortar pharmacy. This puts Lemonaid Health — which was founded in 2013 — in a great position to address the needs of patients in a rapidly evolving healthcare industry.
But why would 23andMe pay top dollar to acquire Lemonaid Health?
23andMe is most well-known for its consumer DNA kits, which can tell people things about their ancestry or genetic predisposition to certain physical traits, but the company’s business plan goes far beyond selling DNA kits. 23andMe has developed one of the largest DNA databases in the world by selling over 12 million of these kits. This huge database now fuels the company’s genetic research into drug discovery and other personalized therapeutics.
In 2018, pharma giant GlaxoSmithKline invested $300 million into 23andMe, and partnered with the company to help develop the drugs discovered through this genetic research. This demonstrates 23andMe’s longstanding intentions to move beyond only selling DNA kits, to becoming a major player in the pharmaceutical and medical space.
23andMe said that this acquisition will help the company further prove itself as a healthtech company, by using genetic research to provide personalized healthcare.
“By starting with genetics as the foundation, we will give patients and healthcare providers better information about health risks and treatments, opening up the door to prevent as well as better manage disease,” 23andMe CEO and co-founder Anne Wojcicki said in a statement. “Lemonaid Health’s focus on the patient and its philosophy of delivering individualized care fits perfectly with our mission of empowering people to take control of their health.”
The acquisition is expected to be completed by the end of 2021.
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