Has health tech investing changed since Theranos?
By DARIUS TAHIR
08/11/2021 10:00 AM EDT
The Big Idea
LESSONS LEARNED?: Let’s take a journey back to 2015. The health-tech startup Theranos was on a high. Venture capitalists loved the company. Hospital executives and former government officials, from retired Marine Corps Gen. Jim Mattis to former CDC Director William Foege, rushed to join the company’s board. Founder Elizabeth Holmes was a magazine cover darling.
Things went downhill fast. Still, even after the Wall Street Journal’s investigations exposed the company’s horrendously inaccurate blood-testing technology, and with Holmes' criminal fraud trial looming California, it’s hard to believe so many experts bought into the Silicon Valley company’s hype. And it raises questions: Has the e-health sector learned its lesson? Are financiers and c-suite execs now warier of startups bearing gifts?
Investors certainly haven’t gotten shy. During the fall of Theranos, some investors worried the company’s failure would make it harder for other health care startups to attract funding. Instead, investments in digital health startups in the first half of this year tripled the total for all of 2016.
“I do not think that it has led to changes in how prospective investors do their diligence,” said Bob Kocher, an investor with Venrock. The environment is “so terrific” that investors are competing for opportunities. “Which means they need to act fast and persuade entrepreneurs that they...
Read Full Story: https://www.politico.com/newsletters/future-pulse/2021/08/11/has-health-tech-investing-changed-since-theranos-797079
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