San Francisco startup uBiome was one of the leading companies in the emerging microbiome space with the intention of unlocking the insights gleaned from the trillions of microorganisms that inhabit the human body.
Research has shown that every individual’s microbiome is unique and that this mix of bacteria, fungi, parasites and viruses can either support a person’s health or act a risk for certain diseases.
uBiome sought to harness this fact with a fecal test that purported to help people educate themselves and takes steps to improve their microbiome health. That pitch was attractive to investors and the company raised more than $100 million from the likes of Andreessen Horowitz, 8VC and OS Fund and achieved a valuation of $600 million.
In recent months, however, the startup has been embroiled in scandal after scandal, culminating in the recent resignation of its interim CEO. Here’s the story of how the company got to that point.
April 2019: FBI agents raided the headquarters of uBiome
While the startup’s first products were direct-to-consumer consumer educational tests, the search for growth and new revenue sources led to the development of doctor-ordered tests like its SmartJane vaginal microbiome test and its SmartGut product, meant to help explore risk factors for conditions like IBS and Crohn’s Disease.
These tests – which the company claimed were clinically relevant – were billable to insurance. But the company reportedly routinely double billed for their products and in some cases conducted tests on years old samples in order to boost sales numbers. Alongside these alleged business practices, questions also emerged about the actual utility and scientific validity of the tests.
May 2019: uBiome co-founders and co-CEOs Jessica Richman and Zac Apte are placed on leave
After the FBI’s search of uBiome’s headquarters, the company placed co-CEOs and co-founders Jessica Richman and Zac Apte on administrative leave and suspended sales of SmartJane and SmartGut. They remained as uBiome board members and were replaced as CEO by general counsel John Rakow on an interim basis, who said the company would fully comply with any investigations.
It later emerged that the two were allegedly involved in a romantic relationship which was hidden from employees and that Richman had allegedly lied about her age to make herself seem younger to the media. A number of independent board members also left the company including co-founder Witt Wisebram and UCSF biochemist Joe DeRisi.
June 2019: Richman and Apte resign, along with interim CEO John Rakow
uBiome alerts investors of the decision by Rakow to leave the company and of former co-CEOs Jessica Richman and Zac Apte to resign from the board of the directors. The company turned to management consultants Goldin Associates for its new executive leadership.
Replacing Rakow as interim CEO is Goldin Associates Managing Director Curtis Solsvig. Goldin Associates’ Robin Chiu and Karthik Bhavaraju will serve as interim CFO and COO, respectively. Solsvig is a well known corporate turnaround artist who previously led restructuring efforts at companies including Borders Group, Lily Robotics and Atari.
Picture: Mykyta Dolmatov, Getty Images
