Venture Funds That Invested In Theranos: A Comprehensive List

Theranos, a blood-testing startup founded by Elizabeth Holmes, raised over $700 million from venture capitalists and private investors. The company was valued at $10 billion at its peak in 2013 and 2014, but it all came crashing down after a series of explosive reports in 2015 that questioned the efficacy of its technology. Some of the biggest venture funds that invested in Theranos include Draper Fisher Jurvetson (now Threshold), ATA Ventures, and Partner Fund Management. Theranos also attracted investments from high-net-worth individuals and families, such as Rupert Murdoch, the Walton family, Betsy DeVos, and Carlos Slim.

Rupert Murdoch, owner of Fox News, invested $125 million

Rupert Murdoch, the Australian media mogul and owner of Fox News, invested $125 million in Theranos. Murdoch is the executive chairman of News Corp, the parent company of the Wall Street Journal, which published the investigative report that first brought the problems at Theranos to light. Murdoch's investment in Theranos was revealed to be a hoax, as the company misrepresented its financial status and technology to investors.

Murdoch invested in Theranos between 2014 and 2015, before the Wall Street Journal's reporting exposed issues within the company. He led a $5.8 million Series A funding round in February 2005, and Theranos subsequently raised additional funding from investors such as ATA Ventures and Partner Fund Management. Murdoch's investment was a significant portion of his net worth, calculated by Bloomberg to be around $7.88 billion.

The decision to invest in Theranos was unusual for Murdoch, as he has not made many investments throughout his career. In addition to Theranos, he has invested in late-stage rounds of Xunlei, a Chinese computing and blockchain company, and Cyanogen, an open-source software company. Murdoch's stake in Theranos ended up being worth only $1, as he sold his shares back to the company, allowing him to potentially write off the investment as a loss and save millions in taxes.

The Theranos scandal involved the company's founder, Elizabeth Holmes, and her former business partner, Sunny Balwani, who were both found guilty of conspiracy and wire fraud. Holmes was sentenced to 11 years in prison, while Balwani received a 13-year sentence. They were ordered to pay a total of $452 million in restitution to the company's investors, with Murdoch being the primary beneficiary of this compensation.

The Walton family, heirs to Walmart, invested $150 million

The Theranos scandal is a cautionary tale of a startup that rose to prominence in Silicon Valley, only to come crashing down amidst civil and criminal investigations. Founded by Elizabeth Holmes, Theranos was a blood-testing startup that claimed to revolutionise the industry with its innovative technology. However, it was later revealed that the company's technology was inaccurate, and civil and criminal investigations ensued.

Among the investors who lost millions of dollars due to their involvement with Theranos was America's wealthiest family, the Walton family. The Waltons are the heirs to Walmart, the world's largest retailer by sales, and their collective fortune is primarily derived from their stake in the company. By carefully structuring the ownership of Walmart's stock, Sam Walton, the company's founder, ensured his family's financial success even before his death in 1992.

The Walton family invested a significant sum of $150 million in Theranos. This investment was likely influenced by the compelling mission of the startup and the assumption that the numerous luminaries associated with Theranos had conducted thorough due diligence. However, the investment turned out to be a gigantic bad bet as Theranos failed to deliver on its promises.

The Walton family's investment in Theranos is a notable example of how even the wealthiest and most successful individuals can be swayed by the emotional appeal of a company's mission and the celebrity status of its CEO. Despite their vast resources, they, along with many other prominent investors, were duped by Theranos and its fraudulent claims.

Betsy DeVos, US Secretary of Education, and her family invested $100 million

Betsy DeVos, the former US Secretary of Education, and her family were among those who lost money when Theranos collapsed. The DeVos family lost $100 million in their investment in the blood-testing company, which was founded and led by Elizabeth Holmes.

DeVos, an American politician, philanthropist, and conservative activist, served as the 11th US Secretary of Education from 2017 to 2021 under the Trump administration. She is known for her support for school choice, school voucher programs, and charter schools, and has been a prominent figure in Republican politics for several decades.

The DeVos family's wealth is derived from Amway, a multi-level marketing company, and they are estimated to have a net worth of around $5.4 billion. They have been major donors to Republican political candidates and the party itself, contributing more than $17 million since 1989. Betsy DeVos has also been an outspoken opponent of government limits on political donations and spending, arguing that such limits infringe on free speech.

The decision to invest in Theranos, therefore, aligns with the family's conservative political and financial leanings. However, it is unclear what specific motivations led to the $100 million investment in Theranos. The investment represents a significant portion of the family's wealth, and it is possible that they were attracted to the company's mission or the celebrity status of its CEO, Elizabeth Holmes.

The loss incurred by the DeVos family in the Theranos scandal underscores the risks associated with investing in startups, particularly those that make grandiose claims that are later revealed to be built on deception and lies, as was the case with Theranos.

The Cox family, owners of Cox Enterprises, invested $100 million

The Cox family, owners of the media giant Cox Enterprises, invested $100 million in Theranos. The family's holdings are worth $41 billion, with a net worth of $26.8 billion. The investment in Theranos was likely made through their family office, which manages the family's wealth.

Cox Enterprises is an American privately held conglomerate headquartered in Atlanta, Georgia, with approximately 55,000 employees and revenue in 2022. The company's major subsidiaries are Cox Media Group, Cox Communications, and Cox Automotive, with brands including AutoTrader, Kelley Blue Book, and Manheim Auctions.

The investment in Theranos was likely influenced by the company's compelling mission and the presence of luminaries on its board of directors. However, it is unclear if the Cox family conducted thorough due diligence before investing.

The Theranos scandal, which involved founder Elizabeth Holmes being found guilty of fraud, has raised questions about the diligence conducted by investors. The company raised about $1.3 billion in funding over its history, attracting high-profile investors such as Rupert Murdoch and Tim Draper.

Mexican businessman Carlos Slim invested $30 million

Slim's investment strategy often involves buying troubled or underappreciated assets at a low price, turning them around, and then selling them for a significant profit. This approach has earned him a reputation as a "turnaround specialist." Slim's conglomerate, Grupo Carso, spans numerous industries in the Mexican economy, including telecommunications, healthcare, industrial manufacturing, transportation, and energy.

Slim's interest in Theranos may have been influenced by his background in healthcare and technology. His conglomerate includes companies in the healthcare sector, and he has previously invested in technology startups. Additionally, Theranos' promise of revolutionizing blood testing with just a finger prick may have aligned with Slim's interest in innovative and disruptive technologies.

The $30 million investment in Theranos is a relatively small amount compared to Slim's overall wealth and investment portfolio. However, it is important to note that Theranos attracted investments from several high-profile individuals and families, including media mogul Rupert Murdoch and the Walton family, highlighting the company's ability to secure significant financial backing before its downfall.

Slim's investment in Theranos ended up being a loss due to the company's fraudulent activities and eventual dissolution. Elizabeth Holmes, the founder of Theranos, was found guilty of fraud and convicted on multiple counts of wire fraud and conspiracy to commit wire fraud.

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