Spora Health’s founder painted a rosy portrait of his healthcare startup. The reality is more complicated.

  • Spora Health’s founder and CEO, Dan Miller, told Insider his firm was seeing thousands of patients.
  • Insider has since found Spora is struggling after closing shop and laying off its workers in 2022.
  • Miller was pushed out of his last company after he was accused of misusing funds, documents show.

According to Dan Miller, his startup Spora Health was doing well, providing high-quality care to “thousands” of people online. But he’s now backtracking after Insider discovered Spora struggling after laying off workers.

Miller founded the Bay Area startup in 2019 to address a serious issue: people of color in the United States have poorer healthcare experiences and outcomes than white people. He stated that he wished to eliminate these disparities by educating healthcare providers about bias and health equity.

Spora received a great deal of media attention early on. Miller’s mission was highlighted in articles in Fast Company, TechCrunch, and other publications. Spora was first profiled by Insider in 2021, when it received $3 million in a seed-plus round, bringing its total funding to $4.1 million. Miller recalled that the company was small at the time, serving about 100 patients across four states.

Insider interviewed Miller two years later to see if he should be included on an annual list of top young healthcare leaders. Miller stated in a July interview that the company had “expanded significantly,” offering online healthcare in more than 22 states. He stated that Spora would be available nationwide this year.

Miller stated that Spora was serving “thousands” of patients “right now” and that the company was collaborating with “a lot of large enterprises,” including Fortune 10 companies, to provide Spora’s services to their employees or other groups of people. He refused to name the companies.

“I wish I could say some names, but I can’t right now, but things have been going really, really well,” he said at the time.

Miller gave the impression that Spora was a young company that was firing on all cylinders. Insider included Miller on the list and published an interview with him based on the interview, Spora’s mission, and previous conversations with him.

Following the publication of the interview, a former employee contacted Insider to share a more troubling view of Spora, prompting Insider to conduct further research into the company.

According to interviews with seven former employees and a company source, as well as an internal memo, Spora shut down, at least temporarily, near the end of 2022 and laid off its small team of workers after failing to pay them for a month. Some former employees are still attempting to recoup their wages from Spora.

Insiders also discovered that Spora’s size may be more limited than Miller claimed. Some of the clinicians listed on Spora’s website have left the company or are no longer seeing patients. According to public records, Spora’s business registrations have become inactive or out of compliance in a number of states.

In response to these revelations, Miller confirmed in a phone call on October 23 that Spora had laid off all of its employees after failing to raise a Series A funding round last year. He stated that he believed the company would have to close and that he was able to keep Spora alive by renegotiating and signing new contracts with employers and health plans.

He stated that while over 2,000 people had registered online to receive care from Spora, not all of them had attended appointments with a clinician. He declined to say how many people had received Spora care this year, only that “it’s been slow.” He stated that the company, which now has fewer than five employees, is working to raise funds in order to hire more people and grow.

“Going into 2023, we were able to have another chance and keep our doors open and try to keep serving all of our patients and all of our customers and stakeholders,” Miller said in a press release. “But obviously as a solo founder and running the show on my own for a little bit of time, things are slow.”

Insider also reviewed internal communications and a complaint filed with the US Securities and Exchange Commission that show Miller was fired from his previous venture before Spora, a company that provided online mental-health care, after he was accused of misappropriating tens of thousands of dollars in company funds. Miller declined to comment on this particular company.

Miller has been removed from Insider’s list of top young healthcare leaders.

According to an email, Spora will close in 2022 and lay off its employees.

Spora appeared to be gaining traction in early 2022. Miller stated in a July interview that it had shifted its focus from selling directly to consumers to also working with employers. According to three former Spora employees and another source close to the company, the startup had at least one large contract, with Apple. According to Spora’s website, Apple collaborated with Aetna and UnitedHealthcare to provide Spora to Apple employees.

Aetna and Apple did not respond to requests for comment. UnitedHealthcare did not respond to a request for comment.

Nonetheless, five former employees stated that as of the latter half of 2022, Spora was treating only a few patients, not thousands.

Things began to go wrong at Spora by the middle of 2022. According to five former Spora employees and a source close to the company, Miller spent six weeks away from the company in June and July of that year while participating in a Stanford Graduate School of Business executive education program. According to four of those former employees, Miller left Spora in the hands of his chief of staff, who had only been with the company for a few months.

His absence perplexed some employees, who assumed he was working on raising a Series A round. Two former employees said that while Miller was away, progress on various projects stalled because he wasn’t available to sign off.

According to four former employees, paychecks stopped coming in November.

Then, on the Monday following Thanksgiving, Miller called a company meeting and informed employees that Spora was closing down, according to two former employees. According to three former employees, Miller stated that the company did not have enough money to continue operations.

Miller then sent an email to employees on November 30 in which he stated that Spora had ceased operations and that “everyone’s employment is terminated” as of November 28. A copy of the email was reviewed by Insider, who also stated that any retroactive payments would be made directly to employees’ bank accounts. He stated in the email that Spora was in acquisition talks.

Three former employees recently told Insider that they had not been paid in full and were working to recover what they believe they are owed.

Miller told Insider that after the Series A round fell through, he expected to be able to pay employees and wind down operations at Spora with bridge financing. However, he claimed that an investor gave Spora less than it had initially stated, and that Spora did not have enough money to pay all employees.

Refactor Capital, Human Ventures, and MaC Venture Capital, among Spora’s investors, did not respond to requests for comment on this story. M13 Ventures declined to comment.

Miller stated that he paid some employees with his own money in November and December, and then paid other former employees what he believed to be the full amount Spora owed them in late February and early March of this year. Spora has been in contact with former employees to determine how much money it still owes them, and Miller stated that he was working to resolve the situation.

Miller was fired from his previous job after being accused of misusing company funds.

Miller referred to Spora as his third company. It is not the first time that problems have arisen.

According to news articles and his LinkedIn profile, Miller previously founded the mental-health care company Level Therapy, a 2016 app that allowed people to have video chats with therapists, and FreshSessions, a marketplace for musicians to book recording studios.

According to company documents, Level raised hundreds of thousands of dollars through the incubator 500 Startups (now 500 Global), a SeedInvest crowdfunding campaign, and individual investors.

According to internal documents and emails, Level executives accused Miller of misusing company funds for personal gain in September 2017 and demanded that he resign. According to an internal email, Miller’s cofounder also filed a police report that month regarding his use of funds. The report was filed, according to a police department document, but its contents are unknown.

In October 2017, an investor filed a complaint with the SEC alleging that Miller misappropriated funds and misled prospective investors about the company’s finances and progress. An insider obtained a copy of the complaint.According to the investor, the SEC never responded to his complaint. According to an SEC spokesperson, the agency does not comment on the existence or nonexistence of a potential investigation.

According to an auditor’s analysis provided to Level executives in September 2017 and viewed by Insider, at least $31,000 of expenses Miller charged to Level in 2017 were for personal reasons and unrelated to business. According to a summary of the audit, the entire amount of an outside investment did not appear to have been deposited in Level’s bank account.

Miller denied allegations of fraud in an email obtained by Insider in September 2017. According to a copy of a promissory note dated December 13, 2017, he eventually agreed to pay Level approximately $32,000. According to a message obtained by Insider, he paid the sum more than three years later, in February 2021.

Miller had already moved on by that point. Spora raised approximately $1 million in seed funding, according to news outlets in November 2020.

Miller declined to comment on his time at Level in the October 23 interview.

Spora most likely isn’t operating at the scale Miller claimed

Miller has continued to do interviews about Spora and celebrate company milestones this year, with no mention of the company ceasing operations or laying off employees.

Miller posted on LinkedIn about the company’s accomplishments, including posts about a collaboration with a design studio and achieving accreditation for Spora’s cultural-competency training program. Spora released a press release in April detailing the findings of its maternal-health program.

Spora’s current reach appears to be more limited than Miller stated in July.

According to a review of public documents, Spora’s medical group has filed paperwork to do business in at least 18 states, but the registrations aren’t active or current, or have been revoked, in ten of them.

Miller stated in the October 23 interview that Spora’s counsel did not file this paperwork on time due to a clerical error, but that it had since been sent off to bring Spora’s registrations back into good standing. He claimed Spora had coverage in 22 states. Nonetheless, as of October 27, people in only nine states could sign up for a membership on Spora’s website.

Spora’s website also included clinicians who no longer work for the company, resulting in inaccurate information about the company’s medical staff.

According to Insider’s review, 11 clinicians — mostly nurses and physician assistants — were listed as available for appointments as of mid-September. Four of them told Insider that they had either stopped working with Spora or hadn’t seen any Spora patients in over a year. Two of the clinicians refused to speak with Insider, and the rest could not be reached.

Two doctors who were listed as “featured Spora providers” on Spora’s website also told Insider that they no longer worked for the startup. According to two former employees, the company’s founding physician, whose name appears on an email sent to new members, no longer works for Spora.

Miller stated that Spora is working to ensure that its systems do not display providers who do not have availability or who have left the company.

“Sometimes things, it takes time to get to them with the team that we have right now, the limited team and the limited resources and the folks that we’ve brought back,” Miller said in a statement. “But we’re working to make sure that we can continue to grow and scale, and also that we continue to provide high-quality care for everyone, but also making sure that the product reflects that.”

One of the former clinicians still listed as taking appointments told Insider that despite starting with the company in mid-2022, she never saw any patients before being told at the end of last year that it was closing down.

Another former clinician stated that she had only treated a few Spora patients.

“It wasn’t a very busy place,” she admitted.

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