![]() ![]() Safeway soon signed a contract with the blood-testing start-up and spent nearly $400 million on the deal. What could be more convenient for their customers than to come into the store, do a finger-prick blood test, buy their groceries, and pick up their results on the way out? For Safeway and Walgreens, this was a sure-fire way to boost sales and profits. The company soon had investors falling at their feet and indeed raised $945 million from famous venture capitalists including Tim Draper, Donald Lucas and Dixon Doll as well as from powerful tech and media moguls such as Larry Ellison and Rupert Murdoch.įurthermore, US grocery store giants who had recently moved into prescription drugs and vaccine provisions saw Theranos’ offering as a golden ticket. Naturally, this Silicon Valley “unicorn” started to get everyone talking and its founder Elizabeth Holmes was labelled as the next Steve Jobs and named by TIME magazine in 2015 as one of the “Most Influential People in the World”.ĭuring a time when technological innovation was beginning to unquestionably transform entire sectors of the economy at a rate never seen before, Theranos exemplified that dynamic. Theranos was a consumer healthcare technology start-up that promised a revolution in blood testing by claiming that with one simple drop of blood, their technology could derive 100s of diagnostics and offer fast results at the fraction of regular lab costs. In fact, it was during a boom time for VC back in 2014 that Theranos quickly raised $633 million from investors who were keen to get a piece of what US President Joe Biden claimed to be ‘the laboratory of the future’. With deals getting bigger and heightened competition causing them to move faster, the time for thorough IT due diligence can often slip away from investors. With the technology sector now making up 20% of M&A deals, with private equity backed M&A reaching $839.6 billion, 2021 was the biggest year for private equity since record keeping began. Indeed, in global M&A deals, technology continues to ‘eat the world’ as shown through a record breaking 133% increase in 2021. In recent years, the pace of technological innovation has unquestionably been transforming entire sectors of the economy at a rate never seen before. Did investors perform sufficient due diligence? Did they not know what to look for? Or was it normal for Theranos to keep their cards so close to their chest when it came to their technology and data? With the Biotech start-up now featuring as the subject of new Hulu series "The Dropout”, questions around the technological due diligence have started to circulate again. When Theranos eventually shut down in 2018, the investor money of course disappeared along with it. The Silicon Valley start-up raised $945 million during its lifespan from various investors, despite having a blood-testing technology that did not perform as promised. ![]() The case of Theranos and its founder Elizabeth Holmes- who at one point was named the world’s youngest billionaire- has been examined numerous times in books, podcasts and documentaries. ![]() It’s a cautionary tale for investors everywhere. ![]()
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