Mikey Tom December 01, 2015
Theranos has a lofty mission: to make actionable health information accessible to people everywhere in the world. The company aims to do this through a variety of innovative laboratory tests using blood samples that can be as small as a single drop. If successful, Theranos believes more people will opt to get tested, leading to a higher percentage of diseases being diagnosed and treated sooner.
With technology that has the potential to have large, worldwide implications, the company has been able to consistently raise VC funding at an ever-rising valuation. Since Theranos’ founding in 2003, it has secured roughly $750 million in total funding and has seen its valuation increase from $27 million at its first raise to an astounding $9 billion with its most recent round in March, according to the PitchBook Platform.
At face value, this looks like it could be one of the great companies of our time. The journey for Theranos hasn’t been all up and to the right, however. Recently, the WSJ wrote an article that called Theranos and its technology into question, claiming that neither may be as advanced as advertised. This led to problems arising in regard to the company's partnership with drug store chain Walgreens. Theranos and Walgreens had partnered to launch wellness centers (Theranos lab testing locations) inside certain Walgreens stores, launching locations across Arizona and California. But after the WSJ article, Walgreens reportedly stated that it did not have concrete plans to expand the partnership past the 41 stores that now have wellness centers.
This news came at an inopportune time for the company as it's reportedly looking to raise $200 million at a $10.8 billion valuation. With doubts seemingly rising, Theranos may find it difficult to convince both new and existing investors to back the company, especially at a valuation that is $1.8 billion higher than its previous one.
This could lead to a few different outcomes. First, if investor interest has dwindled as a result of the recent controversy, Theranos could have to raise a down round—a financing that values the company lower than its previous round. Another possibility is the company could just not raise a round and wait for its funding environment to turn more favorable. Theranos did secure $573 million in March, after all. Then, of course, there's the possibility that the recent events will have no bearing on investor confidence and Theranos will go through with its next funding round at its planned increased valuation.
Below, we’ve laid out a timeline that includes Theranos’ funding and valuation history, as well as some notable company events. Time will tell if investors will continue to support the company and its upward trending valuation or if we’ll see it flatten, or even drop.
(Click to enlarge)