Buzzy microbiome startup uBiome just filed for bankruptcy
- Buzzy startup uBiome filed for bankruptcy on Wednesday, a court filing shows.
- Founded in 2012, uBiome raised $105 million from investors to explore the microbiome, a "forgotten organ."
- The FBI raided 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 was flawed in ways that risked making uBiome's tests unreliable, Business Insider previously reported.
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Silicon Valley gut-health startup uBiome 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 a court 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 Chief Executive Officer Curtis G. Solsvig III said in a statement. "Our Chapter 11 filing allows us to preserve the value of these assets for all stakeholders and continue to serve current and new customers, while we evaluate potential buyers. 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."
The company has been in hot water for some time: uBiome is currently under federal investigation related to its billing practices and laid off half its staff earlier this summer. In addition, insiders told Business Insider that key science was flawed from the start, prompting the company to start an internal investigation alongside a top science journal where it published its basic research.
The value of uBiome, which raised $105 million from high-profile investors including OS Fund and 8VC, lay in its accumulated knowledge of the microbiome - the trillions of bacteria living in and on our bodies and believed to powerfully influence our health.
Insiders previously told Business Insider that that knowledge was misinformed, raising further questions about the company's prospects.
This is a developing story. Please check back for updates.
