Healthtech startup DayTwo shuts down
Healthtech startup DayTwo shuts down
Once one of the most promising medical startups in Israel, DayTwo raised $85 million in total, but failed to navigate market challenges.
DayTwo, once one of the most promising medical startups in Israel, is closing its doors for good. The company's management informed the remaining few dozen employees on Monday that it will be shutting down, Calcalist has learned. DayTwo declined to comment on the news.
As sad as the closure is, it is not entirely surprising. About a year ago, DayTwo laid off most of its employees, leaving only a small core team focused on supporting existing customers and exploring new development directions. At its peak, DayTwo employed hundreds of workers.
DayTwo was founded based on the research and development of two professors from the Weizmann Institute, Eran Segal and Eran Elinav, and was established with the assistance and funding of Marius Nacht, the founder of Check Point, who in recent years has focused primarily on investments in medical startups. The company was founded in 2015 and raised a substantial $85 million over its lifetime from investors including the aMoon fund, the Israeli 10D fund specializing in early-stage companies, the Samsung Next fund, Cathay Innovation Ventures, Poalim Capital Markets, La’maison Fund, and Micron Ventures. In 2018, DAYTWO also received a small investment from basketball player Omri Casspi, who used the company’s kit and even served as its spokesperson in the Israeli market.
DayTwo’s goal was to develop and market kits that tailored proper nutrition for diabetics based on their stool samples. The unique aspect of the company’s nutrition recommendations was that they didn’t necessarily advocate traditional diet foods; instead, they sometimes recommended that it was healthier for individuals to eat foods like pizza, hamburgers with fries, or bread with butter. The analysis of the stool samples allowed for personalized recommendations, based on genetics and blood sugar tests, with tracking available through an app. While DayTwo showed promising results in improving blood sugar levels, the results in terms of weight loss were inconclusive. Additionally, there was criticism that some of the foods highly rated by DayTwo’s system were not healthy, even if they helped lower blood sugar levels.
Despite initial enthusiasm and distribution through Maccabi and Clalit health services, which offered the kits for a one-time fee, DayTwo’s business model ultimately failed to be profitable. Four years ago, the company’s CEO and co-founder, Lihi Segal, left the company. More recently, the company was managed by Gal Gonen, who also served as CFO. The plan was to enter the American market with a subscription model aimed at organizations and insurance companies, some of which had signed agreements with the Israeli company. However, it seems that the popularity of Ozempic-type diabetes injections, which help both maintain appropriate blood sugar levels and support weight loss, undermined DayTwo’s target market of diabetic and pre-diabetic patients.
At the beginning of 2023, DayTwo’s cooperation with Maccabi and Clalit ended, and since then, new kits have not been available for purchase, although support for existing customers continued. Additionally, in 2023, the company sold its laboratory and transitioned to working exclusively with distributors in the U.S. At the end of 2022, DayTwo announced significant cutbacks, including the dismissal of dozens of employees in Israel and the U.S. At that time, the company employed 150 people, split equally between Israel and the U.S.
