A Closer Look at the Ashton Kutcher-Backed Startups Selected for COVID-19 Testing in Iowa

The Cedar Rapids native's friendship with the CEO of a Utah startup called Qualtrics is what led to Governor Reynolds' decision to launch the TestIowa initiative — but is the hydroxychloroquine-boosting CEO of another Silicon Slopes startup involved in the effort cause for concern?

By
Gavin Aronsen
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Actor Ashton Kutcher, promoting resources relating to the COVID-19 pandemic during a video webcast in late March. Screenshot via @aplusk/Twitter

Iowa Governor Kim Reynolds raised some eyebrows Thursday when she explained how the state settled on a $26 million, no-bid contract with the Utah-based tech startup Nomi Health to ramp up testing for COVID-19: Actor Ashton Kutcher, who hails from Cedar Rapids, told her about a tech executive friend of his working on a similar initiative in the western state called TestUtah.

“Mr. Kutcher seems like a great guy but not sure what public health expertise he brings for advising our pandemic response,” quipped Democratic Senator Joe Bolkcom, speaking to the Associated Press. “But if he’s available, maybe he can go inspect the meatpacking plants,” which have been hit by serious coronavirus outbreaks in Iowa and nearby states.

What Kutcher does have is a lengthy background in venture capitalism. That’s how he met Ryan Smith, the CEO of another Utah tech firm called Qualtrics, which has partnered with Nomi Health. The contract for the TestIowa initiative that launched Tuesday stipulates that Nomi Health will provide 540,000 COVID-19 tests over the next six months. Qualtrics has already set up a website where Iowans can fill out a questionnaire to determine whether they might qualify for one of the tests.

Alongside Barack Obama and Richard Branson, Kutcher headlined the first day of an annual summit hosted by Qualtrics in March 2019 that was attended by about 10,000 people, according to a local TV report. Smith opened the event, speaking on stage in front of an enlarged image of an April 2016 issue of Forbes magazine with a photo of Kutcher on the cover. “STARTUP STAR ASHTON KUTCHER,” it teased. “FROM UBER TO AIRBNB HE’S TURNED $30 MILLION INTO $250 MILLION.”

The cover story described how, as he landed typecast film roles based on the success of That ‘70s Show, where he starred as the dimwitted pretty boy Michael Kelso, Kutcher was hobnobbing with Silicon Valley investors. He drew inspiration from 50 Cent, pre-bankruptcy, after the rapper and VitaminWater spokesperson netted an estimated $100 million when the beverage’s parent company was sold to Coca-Cola in 2007. Kutcher himself partnered with Guy Oseary, a talent manager whose clients include Madonna and U2. The two built a portfolio of dozens of investments, including an early stake in Uber that made them millions.

In 2015, Kutcher and Oseary launched the venture capital firm Sound Ventures to further expand their investment efforts. Since the coronavirus pandemic hit the United States, Kutcher has used this platform to share information relating to the crisis. In late March, he tweeted a video of himself discussing pandemic-related resources, including a list of epidemiologists to follow on Twitter, a website with updates on school closures, crisis budgeting tips, and information about how to get tested for COVID-19.

Just over 11 minutes into the video, Kutcher mentioned Qualtrics. “This is not a company we’re involved with,” he said, “but the CEO, Ryan Smith, reached out to me and told me about something amazing they’re doing.” Kutcher went on to describe a survey tool the company developed to help address workforce needs that he said could be a boon for employees working remotely during the pandemic.

Last year, Qualtrics reportedly donated $25,000 to Thorn, a nonprofit co-founded by Kutcher to combat child sex trafficking. In January, before he and Mila Kunis, his wife and That ‘70s Show co-star, began selling Quarantine Wine to raise funds to fight the coronavirus pandemic, Kutcher was spotted at a Utah Jazz basketball game in Salt Lake City seated next to Smith. This week, after Governor Reynolds announced the TestIowa initiative, Kutcher said in a statement that he was “good friends” with the Qualtrics CEO and had recently spoken with him about the startup’s work in Utah because of its similarity to a concept pitched by a company in which Kutcher did invest.

Smith moved to Utah two decades ago, after his father, Scott Smith, took a job at Brigham Young University, according to a recent profile in The Salt Lake Tribune. In 2002, he and his brother, Jared Smith, working out of their parents’ basement, launched Qualtrics along with Stuart Orgill, a college friend of Ryan’s. The startup was initially geared toward providing field research software for academics but quickly grew, inking contracts for customer-survey software with giants of the industry including Microsoft. In November 2018, Qualtrics was sold for $8 billion to SAP, a multinational software corporation based in Germany, with an agreement that Ryan Smith would stay on as the company’s CEO.

Two other tech companies that, like Qualtrics and Nomi Health, are based in Utah’s Silicon Slopes — the Salt Lake City area’s answer to Silicon Valley — are also involved in the TestIowa initiative: Domo, a cloud computing startup; and Co-Diagnostics, a molecular diagnostics company that was recently granted emergency use authorization by the Food and Drug Administration for COVID-19 testing. (According to a publicist representing Kutcher, the AP reported, the actor is not invested in any of the companies that are a part of the TestIowa contract.)

At a White House briefing this week, Vice President Mike Pence mentioned the deal Reynolds struck with Nomi Health and its partners, saying “it will triple testing capacity” for the coronavirus in Iowa. Domo founder and CEO Josh James, a child actor-turned-tech entrepreneur, expressed his excitement in a tweet.

Aside from Kutcher’s involvement and the no-bid contract — which was consistent with an executive order issued by the governor suspending such requirements to allow for a more immediate response to the crisis — the most questioned aspect of TestIowa so far may be a section of the survey Qualtrics set up regarding allergies. “Do you have any of the following allergies or conditions?” it asks, followed by a list of 20 choices that begin with chloroquine and hydroxychloroquine — the unproven anti-malarial drug pushed by President Trump as having “a real chance to be one of the biggest game changers in the history of medicine” against the wisdom of his own advisers, one of whom was allegedly ousted for challenging his position.

According to the TestIowa contract, if residents “test positive and are in high-risk category, consider medication treatment (e.g. hydroxychloroquine or chloroquine) administered by the Health Department in order to keep hospital bed load low.” Sarah Reisetter, deputy director of the state’s Department of Public Health, said the questions were included in case the drugs are proven effective in the future, the Iowa Capital Dispatch reported.

The truth appears to be more complicated. Nomi Health’s founder and CEO, Mark Newman, has been promoting hydroxychloroquine as a potential treatment for more than a month now. On Friday, The Salt Lake Tribune revealed that the same allergy questions were just added to the TestUtah survey, despite a new study out this week casting further doubt on the drug’s efficacy. The move, the Tribune reported, raises questions about Newman’s position on the board of directors of Meds in Motion, a pharmacy that has received an $800,000 state contract from the federal government for 20,000 doses of hydroxychloroquine.

But Reynolds was impressed with the initiative, she said, after contacting Utah Governor Gary Herbert, a fellow Republican, to discuss it after hearing from Kutcher. The state of Nebraska, led by Republican Governor Pete Ricketts, is now working with the Silicon Slopes startups to implement its own testing program. Because of the potential value of mass testing in mitigating the coronavirus pandemic, TestUtah has generally been well received.

Gavin Aronsen
Gavin Aronsen
Gavin Aronsen is an editor and reporter for and founding member of the Iowa Informer. He previously worked as a city reporter for the Ames Tribune, research assistant to investigative journalist Wayne Barrett at the Village Voice, and in various roles at Mother Jones, where his work contributed to a National Magazine Award nomination for the magazine's digital media coverage of the Occupy Wall Street movement. Email: garonsen [at] iowainformer [dot] com.

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