The digital startup industry once carried a value of $1.5 billion. Today, it can’t quite keep investors interested.

Proteus Digital Health is reportedly seeking a financial lifeline after it failed to extend a $100 million financing round.

The digital tech firm has been at the forefront of trying to create “digital smart pills” that would inform a smartphone if patients remembered to take their medication. The technology – on the surface – was cutting edge. It hit its $1.5 billion valuation just three years ago.

Then, reality sunk in. CNBC reports that the firm is trying to raise cash and efforts aren’t going very well. In November, the firm furloughed employees, according to the report. The company is still trying to pick up the pieces after a major partnership fell through and its Chief Commercial Officer Molly O’Neill departed in 2018.

Proteus Digital Health Crashes Back to Earth

The tech startup was once a darling of Silicon Valley. At one point, it raised more than $500 million on the promise that it could streamline one of the biggest challenges in pharmaceuticals: Ensuring patient compliance with medical instructions. The lack of adherence represents about a $100 billion to $300 billion problem for the healthcare sector.

CNBC reports that rival digital health companies are starting to see an increase in resume submissions to their offices. Proteus has roughly 300 employees, and it can’t raise enough cash to meet certain obligations.

“Proteus is currently conducting an operational review and restructuring our business to optimize effectiveness,” a company spokesperson told last week. “We are taking into consideration the impact of our restructuring on employees, patients, customers, partners and investors.”

Finally, Proteus isn’t the only digital health startup facing these challenges. Recently, Pear Therapeutics announced that it lost a major partnership with Novartis’ generics division, Sandoz. Pear develops applications for substance use disorders.

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