For many, Theranos serves as a reminder of how healthcare startups need to be closely vetted by investors. But in the wake of Theranos' downfall, investment and entrepreneurial interest in the biotechnology space is only accelerating, according to The Wall Street Journal.
Healthcare startup investments grew by 51 percent last year to $48 billion, according to PitchBook Data information cited by the Journal. Increased investment in healthcare technology startups shows "the allure of startups building better healthcare has only intensified in the years since the sector's most prominent failure," according to the Journal.
The high amount of capital being poured into healthcare startups is speeding up deal-making, leaving some founders with overarching control while investor scrutiny lags, according to the report. It's reminiscent of the environment that allowed Theranos to exaggerate the efficacy of its technology.
The COVID-19 pandemic has intensified the pressure to create new diagnostics and healthcare technology. Beth Seidenberg, MD, the founding managing director of Westlake Village BioPartners, told the Journal that right now is "the golden age of biotechnology."
"I've never in my career seen so much capital being deployed so quickly," Dr. Seidenberg said, adding that "a lot of the valuations are ones that the companies need to grow into."