Melted for glue

2 June 2016 By Rob Cox Follow @rob1cox

Venture capitalists have wagered on plenty of highly valued startups to destroy the established corporate order. But some so-called unicorns, probably including Theranos, will turn out to be mythical. A wave of “gluenicorns” would be good news for public companies under threat.

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On June 1, billionaire-list keeper Forbes downgraded the net worth of Elizabeth Holmes from $4.5 billion to zero. Holmes, who founded Silicon Valley-based blood-testing upstart Theranos, holds 50 percent of the company, according to Forbes.

A 2014 funding round gave the private firm an implied valuation of $9 billion, but recent developments and news reports have called the company’s technology and worth into question. Citing a source familiar with Theranos’ finances, Forbes said the company’s annual revenue was less than $100 million and concluded that a more reasonable valuation for the business was $800 million. Investors who have injected more than $700 million would be repaid before Holmes received anything.

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