- Silicon Valley microbiome testing startup uBiome applied for bankruptcy protection earlier this month after months of challenges and setbacks.
- Now quits uBiome.
- The startup converts from Chapter 11 to Chapter 7 bankruptcy, which means it will stop operations and liquidate, according to documents Business Insider looked at.
- uBiome once convinced Silicon Valley that testing for poaching was worth $ 600 million.
- But insiders have previously told Business Insider that they questioned the validity of the science behind their products.
After months of challenges and setbacks, Silicon Valley quits uBiome health startup.
The company could not extend the loans that had funded the bankruptcy, and is now appointing a trustee to oversee the liquidation, according to documents seen by Business Insider. The plan still requires approval from the bankruptcy court.
"I have to share some bad news," said uBiome in an email to employees viewed by Business Insider. "We will not be able to continue to function normally because we do not want the funding."
uBiome had previously filed for bankruptcy in Chapter 1
uBiome confirmed the settlement in a press release shortly after this story was written.
"Management and independent directors of the uBiome board have determined that without consensus among the committee, lenders and the company, the conversion to a case under Chapter 7 is in favor of uBiome and its stakeholders," the release said.
Read more: uBiome convinced Silicon Valley that testing for pee was worth $ 600 million. Then the FBI came knocking. Here's the inside.
Court documents in uBiome's initial bankruptcy filing said that the company could owe millions of dollars to health insurance companies, and that they could also face punitive and civil penalties from ongoing investigations related to billing practices. .
The company laid off half the staff this summer. In addition, insiders told Business Insider that the company's key science was deficient from the start, prompting the company to launch an internal investigation. A top scientific journal in which uBiome published its basic research is also investigating.
uBiome raised more than $ 100 million from some of Silicon Valley's top companies in the promise of providing new insights into the microbiome, the trillions of bacteria that live in and on each of us. The startup's main products evaluated an individual's microbiome using a sample of beef.