23andMe Makes First Acquisition, Nabs CureTogether To Double Down On Crowdsourced Genetic Research

Founded in 2006, 23andMe set out with an ambitious goal: To one day make the human genome searchable by becoming the go-to resource for personal genetic information. Leveraging DNA analysis technology and web-based interactive tools, the company developed a “Personal Genome Service” that allows anyone and everyone to access and better understand their genetic data, including their ancestry and predisposition to certain diseases.

But the company believes that its true differentiation and value proposition today derives from a novel research model. Along with providing users with 200+ health and traits reports and ancestry info, the service enables users to opt-into sharing their medical and family history, lifestyle and other phenotypic data, contributing it to genetic research or participating directly in studies and surveys.

So, when 23andMe was recently awarded its first patent for determining a user’s risk for Parkinson’s Disease, it was naturally seen as big validation for its crowdsourced and community-driven approach to genetic research.

With its patent representing both a validation of its research and model and a potential new revenue stream), 23andMe now wants to double down on patient and community-driven research. And what better way to follow your first patent than with your first acquisition? On Tuesday, the company officially announced that it is scooping up the four-year-old CureTogether, a similarly-focused startup that aims to give people the tools they need to create their own research studies, learn about their health, and connect with experts and others who suffer from similar conditions.

Launched in 2008, CureTogether began simply as a way to help people who live with chronic pain fight depression and connect with a community. Starting with three conditions, the startup quickly expanded its scope and today has over 25,000 members, who have shared over four million data points on 576 medical conditions.

While the terms of the deal were not disclosed, CureTogether’s founders Daniel Reda and Alexandra Carmichael will be joining the team, along with, presumably, the startups user base. For 23andMe, the acquisition adds a whole heap of new community resources that will improve users’ ability to share information, talk about symptoms, and compare treatment efficacies as they track their health.

The deal makes a lot of sense from both sides. The two startups have complementary platforms, and there’s no doubt that 23andMe sees those four million phenotypic data points as a valuable addition to its database, using them to inform their research and no doubt develop further vulnerability assessments for diseases beyond Parkinson’s. CureTogether, on the other hand, which has been plodding along at a consistent pace, building a respected support and education community, could have continued on course.

But the appeal of an exit becomes clear when seen as an access point to 23andMe’s sizable $53 million of funding and brand recognition. 23andMe was co-founded by Anne Wojcicki, the wife of Google co-founder Sergey Brin, who has himself contributed financial support to the startup (along with Google). Obviously, Google and Bring would be remiss if this ever translated into favoritism for the platform, but certainly those family connections can’t hurt.

23andMe has built a strong leadership team and has recently begun to make strategic additions to position it for growth as a commercial genetic testing market. Earlier this month, for example, the startup added Andy Page to its board of directors. Page is the President of Gilt Groupe (and previously its CFO), as well as a former COO and CFO at PlayPhone and CFO of StubHub.

These, among others, are why, despite some bumps along the way, the startup now has $53M in backing and seems hard to bet against, especially now that it has fixed its hotly-contested pricing plan (and has its first patent in-pocket).

However, as DNA testing continues to uncover the correlation between specific bundles of our genetic material and our diseases and conditions, 23andMe and others like it will be front-and-center in a much debated and talked about industry.

By nature of what it is, 23andMe has to walk a tenuous line between giving people access to their genetic material and the bundling and use of that information for commercial purposes. So, as much as it wants to sell itself as a way to personalize your healthcare and help learn about and possibly even prevent diseases, it doesn’t want to be seen as a diagnostic tool. It can’t be, because then it would be subject to a host of regulations from the government.

The startup has plenty of time to figure out how to position its patent and how it will use it, if at all. In the big picture, if it can keep from pissing off too many of its users who might feel that their personal, sensitive health information is contributing to the development of patents for its own financial gain, it can be the beneficiary of the huge value that comes from an engaged, patient-driven, crowdsourced research platform. It can do a lot of good, and its acquisition of CureTogether is another step in that direction.