Veritas Genetics, the DNA startup which offered to sequence human genomes for just $599, is ceasing U.S. operations after it struggled to raise new funds

Funding is the lifeblood of every startup. Veritas Genetics, the DNA startup which offered to sequence people’s genomes for rock-bottom price of $599, announcing it ceasing its US operations after it failed to raise a new round of financing and November data breach. Back in 2016, Veritas Genetics is the first in the world to map out a person’s DNA for less than $1,000.

Founded in 2014 by Jonathan Zhao, Jonathan Zhao, Mirza Cifric, and Preston Estep, the Boston, MA-based Veritas was on a mission to remove the barriers to genetic testing so everyone can make the kinds of informed decisions that can lead to disease prevention and early detection. By sequencing genes of more people than ever before, we strive to generate the kind of data that will lead to better disease understanding, earlier detection and more effective therapies. Its main investors are all Chinese, including Lilly Asia Venture, Simcere Pharmaceutical, and TrustBridge Partners.

Veritas had tried to entice consumers to get their genome sequenced by lowering the price to $599. However, the price was not sustainable and the Veritas was losing money on every genome. The startup changed its business model and hoped to introduce a Netflix-like subscription model. Unfortunately, Veritas was unable to find new backers given concerns it had previously taken money from China.

The US government warned technology companies working in sensitive areas, including DNA data, over taking funds from Chinese investors. It’s not just the US. Other nations including from Germany to Britain to Canada, have joined the United States, in shutting doors on Chinese investment due to security concerns. Just last June, US government regulators forced the sale of another American health company, PatientsLikeMe, because its primary backer was in China. To date, Veritas had sequenced between 5,000 and 10,000 genomes so far, but there were signs that demand for the service was weak.

“Due to an unexpected adverse financing situation, we are being forced to suspend our operations in the U.S. for the time being,” according to a report from CNBC, citing an email from the company. “We are currently assessing all paths forward, including strategic options.”

“I can clarify this temporarily affects U.S. operations only,” a spokesperson for the company said. “All of the customers outside of the U.S. will continue to be served by Veritas Europe and Latin America.”

In addition to the financing problem, the startup also confirmed to Bloomberg it experienced a security breach In November that included some customer information. However, the company claimed only a handful of people were affected.