Slashdot Mirror
Days Before Christmas, Theranos Secures $100 Million in New Funding (fortune.com)
An anonymous reader quotes Fortune:
Call it a Christmas miracle -- albeit of a rather perverse sort. Theranos, the digraced medical-technology startup that infamously inflated the capabilities of its devices, has secured $100 million in new funding in the form of a loan. The loan, reported by the Wall Street Journal, will come from Fortress Investment Group. Fortress, whose other underdog bets include a private passenger rail line under construction in Florida, is set to be acquired by Japan's SoftBank. Theranos was reportedly on the verge of bankrutpcy...
By the end of 2016, the company reportedly still had $200 million in cash on hand, but had sharply limited prospects for attracting more capital. It has since settled a major lawsuit with Walgreens, a former client, for an undisclosed but likely substantial sum. According to the Journal, the Fortress loan is expected to keep Theranos solvent through 2018. That will give the company more time for its ongoing effort to reboot as a medical device manufacturer, rather than a testing service.
The loan is conditional on "achieving certain product and operational milestones," notes Fortune, adding "It's unclear whether those might include positive outcomes for the multiple investigations and lawsuits still facing the company."
By the end of 2016, the company reportedly still had $200 million in cash on hand, but had sharply limited prospects for attracting more capital. It has since settled a major lawsuit with Walgreens, a former client, for an undisclosed but likely substantial sum. According to the Journal, the Fortress loan is expected to keep Theranos solvent through 2018. That will give the company more time for its ongoing effort to reboot as a medical device manufacturer, rather than a testing service.
The loan is conditional on "achieving certain product and operational milestones," notes Fortune, adding "It's unclear whether those might include positive outcomes for the multiple investigations and lawsuits still facing the company."
I will just state again here --
The reason so many people find the downfall and disgrace of this company so satisfying is that it symbolizes the just retribution of the market / facts against a company that:
- was based on hype and deception
- punished its employees for speaking the truth
- had access to capital and investment that others with more legitimate products didn't, only on account of its founder's connections
- was so tied to the idea of an idealistic successful woman CEO that they were willing to take shortcuts and sell that more as the product instead
And here is another investor throwing $100m after the bad, hoping to pick something from the scraps. If there's a quicker way to lose $100m, I would be surprised.
There is a fundamental problem with their basic technology in that finger tip blood is not the same as venous blood in many different ways and you can't compensate for that.
I don't read your sig. Why are you reading mine?
Ignoring for a minute the difference between incompetence and fraud, it's worth pointing out that a big selling point for this venture was the gender and youthfulness of the CEO. Nearly every article and interview I saw when the "technology" was first being revealed spent as much time fawning over how wonderful it was to have a young woman "researcher and CEO" as they did actually discussing her supposed invention.
Had she been an old white dude, Theranos would never have gotten the publicity it did. It's fair to point out that her gender played a role in the continuing success of her scam.