Theranos has secured $100 million in debt financing. Sure, somebody gave the blood testing firm identified for handing out questionable check outcomes cash.
First reported by Enterprise Insider, the corporate reportedly informed buyers it had secured the cash from Fortress Funding Group, a New York-based personal fairness agency that was acquired by Softbank earlier this yr.
After all, that is debt financing, not fairness and Theranos will certainly want it because it has been bleeding cash, shedding greater than half its workforce this yr and attempting to give you methods to maintain it afloat.
Theranos was a as soon as Silicon Valley darling valued at over $9 billion for its promise to detect greater than 200 illnesses on a single drop of blood. However the firm fell from grace after it was found it was giving sufferers defective check outcomes. Theranos quickly confronted a number of lawsuits and got here beneath federal investigation. It’s co-founder and CEO Elizabeth Holmes was barred from getting into her personal labs, the labs quickly shut down and the corporate needed to pivot — arduous — to a illness detecting field contraption as a substitute.
The corporate has not raised funding for the reason that mess started in 2015. However, final evening Holmes reportedly informed buyers she believed the corporate would have “sufficient liquidity through 2018” because of the brand new money infusion.
After all, the funding is topic to hitting sure product and operational milestones and provides Fortress 4 p.c of the corporate’s fairness, in response to the BI report.
Holmes letter to buyers additionally outlined a number of modifications she’s made within the final yr to get the corporate again on observe, together with high quality management and regulatory compliance. The corporate settled a number of lawsuits this yr and with the Facilities for Medicare and Medicaid Providers (CMS), the federal government company which first scrutinized Theranos’ testing amenities, including hope that the corporate could possibly function its labs once more sooner or later.
Holmes additionally added within the letter she hopes Theranos will be capable of launch its Zika check within the subsequent 18-24 months; one thing the corporate has been touting since developing with the field technique in 2016.
Holmes additionally talked about the opportunity of extra routine lab testing and “tailored personal sensing systems,” which might be based mostly on Theranos’ many patents.
These strikes all sound promising. The actual query is that if the corporate can undo the harm it has incurred within the public eye. Will anybody belief that this firm is really on observe? No less than Fortess appears to assume so — sufficient to lend them financing by way of the subsequent yr.
The information hits on a serious vacation weekend and thus it could take a while to get extra particulars from the corporate, whether it is prepared. We’ve reached out to Theranos for extra and can replace this story if and once we hear again.