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The story of Theranos startup was described by John Carreyrou in a book “Bad Blood”. Author says that Ex-Theranos CEO Elizabeth Holmes really believed she can help the world. (photo Reuters)

Hype & Fraud: The Fall Of Theranos’ Revolutionary Blood Test

One of Silicon Valley’s unicorn startups announced in 2003 a breakthrough in blood testing. But the innovation turned out to be just a promise, nothing more. A howling success ends now as an unprecedented scandal.

When 19-years-old Elizabeth Holmes founded Theranos, media and investors called her “a female Steve Jobs”. Elizabeth’s great visions and charisma of an experienced entrepreneur were enough convincing to make people believe that a new global tech leader has come. She became a “tech-celebrity” hosted by the biggest US talk-shows, featured on the covers of the magazines like Forbes, Fortune, Inc. The perfect story of how a startup can save the world was based on few simply ingredients: Silicon Valley, brave innovator, revolutionary but some kind of secret technology, health. The promise was to make blood tests using 100-1000 times less blood that it’s needed ordinary in existing laboratory tests. In a short period of time Theranos raised $700 million from venture capitals and private investors. In 2014 the company was valued at $10 billion.

Elizabethe Holmes Forbes Fortune ICT&health
Elizabeth Holmes listed as one of the richest self-made woman in the US with a net worth of $4.5 billion.

The big bubble burst in 2015 when a Wall Street Journal reporter questioned the validity of Theranos’ technology. Consequently, the company was near bankruptcy. In June 2018 Elizabeth Holmes stepped down as CEO. Now the company will close for good after repaying its creditors, announced Theranos in an email to shareholders. Holmes is facing 11 criminal charges for wire fraud. If convicted by a jury, she could spend 20 years in prison.

Elizabeth Holmes is facing 11 criminal charges for wire fraud related to her time as CEO of the company.

The fall of Theranos was described by John Carreyrou in a book “Bad Blood”. Carreyrou said on CNBC that “over the years, [Holmes] ran into setbacks with this vision of a blood-testing device she was trying to pursue, and instead of admitting those setbacks, admitting to her investors where she was with the progress, she lied. And the lies got bigger and bigger, and eventually the lies got so big relative to reality, that it became a pretty massive fraud.”

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