- Buzzy startupuBiome filed for bankruptcy on Wednesday, acourt filing shows.
- Founded in 2012, uBiome raised $105 million from investors to explore the microbiome, a “forgotten organ.”
- The FBIraided uBiome’s headquarters in April,reportedly related to the company’s billing practices. Then, the company’s top executives departed.
- uBiome built a big set of data based on the human microbiome, but the data wasflawed in ways that risked making uBiome’s tests unreliable,Business Insider previously reported.
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Silicon Valley gut-health startupuBiome has filed for bankruptcy protection, capping months of challenges and setbacks for the once-buzzy startup.
uBiome filed for chapter 11 bankruptcy protection in US Bankruptcy Court in Wilmington, Del., according to acourt document. The company has taken out an $8 million loan that will allow it to stay open while searching for a buyer,the Wall Street Journal reported.
“uBiome’s business will be better positioned for success under new ownership,” acting CEO Curtis Solsvig said in a statement.
“This step builds on the decisive actions the Board and new management team have recently taken to stabilize the Company and leverage the substantive value of our advanced microbiome testing and analysis assets,” he added.
The company has been inhot water for some time: uBiome is currently underfederal investigation related to its billing practices andlaid off half its staff earlier this summer. In addition, insiders told Business Insider that key science wasflawed from the start, prompting the company to start aninternal investigation, alongside a top science journal where it published its basic research.
Read more:uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here’s the inside story.
“We have taken significant action to put the company on stronger footing and believe in the strength and potential of uBiome’s scientific achievements and IP,” Kimmy Scotti, 8VC partner and a uBiome board member, said in an emailed statement to Business Insider.
uBiome convinced Silicon Valley that testing poop was worth $600 million
Over its seven-year history, uBiome raised$105 million from high-profile investors including OS Fund and 8VC. But uBiome’s value, which lay in its accumulated knowledge of the microbiome, had long beenprecarious, according to insiders.
As uBiome advanced from citizen science project to clinical-testing company, it overstated the medical value of its tests and prioritized growth over patient care, insiderspreviously told Business Insider.
The problems went deeper than that, some insiders said: uBiome’s basic science wasflawed, they claimed.
That science was used to power all of uBiome’s products — from a casual microbiome test called Explorer to two clinical products called SmartGut and SmartJane. On the heels of Business Insider’sreporting on that science, uBiome began an internal investigation. PLOS One, the scientific journal where uBiome published the research, is investigating as well.
This is a developing story. Please check back for updates.
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