uBiome

uBiome was a San Francisco-based microbiome testing company founded in 2012 that offered at-home gut microbiome testing kits and clinical diagnostics.⁶⁹ The company raised $105 million from investors including Andreessen Horowitz, 8VC, and OS Fund, and was valued at $600 million at its peak.⁶⁹¹²¹³ After an FBI raid in April 2019 over billing practices, uBiome filed for bankruptcy in September 2019 and shut down in October 2019, with its founders later charged with fraud.^12345679

Timeline

Money raised

uBiome raised $350,000 in a crowdfunding campaign in November 2012.⁹¹³ uBiome raised a $5 million seed round in June 2014 led by Andreessen Horowitz.⁹ uBiome raised a $22 million Series B round in November 2016 led by 8VC.⁹ uBiome raised an $83 million Series C round in September 2018 led by OS Fund at a $298 million valuation.⁹ The Series C round brought uBiome's total funding to $105 million.⁹ During the Series C fundraising, uBiome was valued at nearly $600 million and raised approximately $59 million through preferred-stock sales to roughly 27 investors.¹¹ Approximately six investors also purchased more than $2 million of convertible promissory notes during the same period.¹¹ In connection with the Series C round, co-founder Jessica Richman sold approximately $5 million of personally owned uBiome stock, and co-founder Zachary Apte sold approximately $5 million of his personally owned shares.¹¹ uBiome's patents were sold for $7 million in December 2019, less than 1% of its peak valuation.¹⁰

Investors named in the sources: Andreessen Horowitz⁵⁹, OS Fund⁵⁹, 8VC⁵⁹, Y Combinator⁵⁹, DNA Capital⁵⁹, Crunchfund⁵, StartX⁵⁹, Kapor Capital⁵⁹, Starlight Ventures⁵⁹, 500 Startups⁵, ZhenFund⁹, Tuesday Capital⁹, CSC Upshot⁹, Slow Ventures⁹, Daniel Curran⁹, 10x Group⁹, Linden Mobile Ventures⁹, David Spector⁹, Farzad Nazem⁹, Bill Tai⁹, Dentsu⁹.

What happened

uBiome was founded in 2012 in San Francisco.⁶⁹ The company used advanced technology to analyze the microbiomes on the human body.⁶ Its chief product was a stool test that identifies microbes in the gut for patients with chronic gut conditions such as IBD, IBS, Crohn's Disease and ulcerative colitis.⁶ uBiome originated as a crowdfunded citizen science project, raising $350,000 in November 2012.⁹¹³ The company received early support from Y Combinator.⁹

In June 2014, uBiome raised a $5 million seed round led by Andreessen Horowitz.⁹ By the end of 2014, uBiome achieved regulatory lab certification.⁹ In November 2016, uBiome raised a $22 million Series B round led by 8VC.⁹ In September 2018, uBiome raised an $83 million Series C round led by OS Fund at a $298 million valuation.⁹ The Series C round brought uBiome's total funding to $105 million.⁹

During the Series C fundraising, uBiome was valued at nearly $600 million.¹¹¹²¹³ In January 2019, uBiome cut 10% of its workforce to support a strategic shift to a focus on drug development.⁶ Earlier in 2019, uBiome was named one of the top five companies to emerge from incubators in the Bay Area.⁶ In April 2019, the FBI raided uBiome's offices following scrutiny of the company's billings involving Medicare.⁵⁶¹⁴¹⁵ Following the raid, uBiome placed co-founders Jessica Richman and Zac Apte on administrative leave.⁵¹⁵¹⁷

John Rakow, the company's general counsel, was named interim CEO.⁵¹⁷ The company's board of directors conducted an independent investigation into the company's billing practices.⁵ Over the summer of 2019, uBiome slashed more staff, dropping its remaining workforce to less than half what it started with at the beginning of the year.⁶ In August 2019, company insiders told Business Insider that uBiome's science was flawed, raising concern over the accuracy of their product.⁶ In September 2019, uBiome filed for Chapter 11 bankruptcy protection.⁶⁷

During the bankruptcy process, uBiome secured some financing from 8VC and Silicon Valley Bank to support its ongoing operation.⁶ In October 2019, uBiome filed to convert its bankruptcy to Chapter 7 liquidation and announced it would shut down.¹²³⁴⁶ uBiome was unable to secure additional loans to keep it afloat while in bankruptcy protection.⁶ No buyer expressed interest in the company.⁶ In December 2019, uBiome preliminarily sold its patents to Psomagen for $7 million, less than 1% of its peak valuation.¹⁰

In March 2021, the SEC sued co-founders Jessica Richman and Zac Apte, alleging they misled investors during the Series C round.¹¹ The SEC alleged that Richman and Apte portrayed uBiome as a rapidly growing biotechnology company with reliable health-insurance reimbursement and a proven business model.¹¹ The SEC alleged that uBiome's revenue depended heavily on billing practices that insurers were already challenging.¹¹ The SEC alleged that Richman told potential Series C investors in July 2018 that uBiome had achieved revenue growth of almost 900% since June 2017 and projected more than $100 million of total revenue for 2018.¹¹ The SEC alleged that uBiome represented to investors that its clinical tests were covered by existing insurance billing codes and current health-plan guidelines.¹¹

The SEC alleged that Richman and Apte knew or were reckless in not knowing that the company used incorrect or varying billing codes to obtain reimbursement.¹¹ The SEC alleged that insurers ultimately sought clawbacks of prior payments to uBiome.¹¹ The SEC alleged that uBiome employees raised concerns about billing practices during the fundraising period.¹¹ The SEC alleged that management did not adequately disclose those concerns to investors and instead acted to conceal certain practices from insurers, the board and the company's general counsel.¹¹ In connection with the Series C round, Richman sold approximately $5 million of personally owned uBiome stock, and Apte sold approximately $5 million of his personally owned shares.¹¹

In September 2026, the SEC filed consents and proposed final judgments involving Richman and Apte.¹¹ The proposed 2026 resolution does not constitute an admission of the SEC's allegations.¹¹

Legal outcomes

• filedThe FBI raided uBiome's offices in April 2019 as part of an investigation into the company's billing practices.⁵⁶¹⁴¹⁵
• filedThe SEC sued co-founders Jessica Richman and Zac Apte in March 2021, alleging they misled investors during the Series C round.¹¹
• pendingIn September 2026, the SEC filed consents and proposed final judgments involving Richman and Apte, with each agreeing to a $125,000 civil penalty and a three-year officer-and-director bar.¹¹

Where the founders are now

Co-founders Jessica Richman and Zac Apte were placed on administrative leave in May 2019 and resigned in July 2019.⁵¹⁴ In March 2021, the SEC sued Richman and Apte for misleading investors.¹¹

Sources

1. Bankrupt poop-testing startup uBiome is shutting down, Business Insider, 2019-10-02
2. Bankrupt Lab-Testing Startup UBiome Plans to Shut Down, ..., wsj.com, Oct 2, 201
3. Health Testing Startup UBiome Files For Chapter 7 With ..., forbes.com, Oct 2, 201
4. Troubled poop-testing startup uBiome announces plans for liquidation, Endpoints News, Oct 2, 201
5. Microbiome testing service uBiome puts its co-founders on administrative leave after FBI raid | TechCrunch, TechCrunch, 2019-05-02
6. uBiome to Close Doors One Month After Bankruptcy Filing, BioSpace, 2019-10-02
7. Inside the downfall of microbiome startup uBiome, which won a $600 million valuation from top VCs, then went bankrupt, and now has 2 founders facing fraud charges, Business Insider, 2021-03-20
9. uBiome Valuation, Funding & Investors | Multiples, multiples.vc, Sep 18, 20
10. Bankrupt uBiome preliminarily sells patents for 1% of the poop-testing startup's original valuation, STAT, 2019-12-16
11. uBiome SEC Settlement Update: What the $60 Million Funding Case Reveals About Startup Revenue Due Diligence, filingdossier.com, 6 days ago
12. uBiome scandal gives Silicon Valley a kick in the guts, thetimes.com, Mar 28, 20
13. uBiome company information, funding & investors, app.dealroom.co
14. Health Tech Startup uBiome Founders Resign, Interim ..., forbes.com, Jul 1, 201
15. uBiome CEOs Go on Leave After FBI Search, wsj.com, May 1, 201
17. UBiome is under investigation by the FBI, Science for ME, May 1, 201

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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