Healthtech startup DayTwo facing uncertain future after dramatic restructuring
Healthtech startup DayTwo facing uncertain future after dramatic restructuring
The Israeli startup, which raised $85 million mainly from co-founder Marius Nacht, has reduced its staff by over 75% over the past year and is hoping to sell its technology to another company
After much buzz and hype, Israeli nutrition company DayTwo is nearing the end of its journey. The company, co-founded and primarily funded by Marius Nacht, is reducing most of its operations and retaining only a small core team for development and customer service in Israel and the U.S., according to Calcalist's sources.
The aim is to provide support to existing customers and potentially sell its technology to an external party. The company employed 150 staff in 2022, but currently only has 35 employees remaining, with 20 in Israel and 15 in the U.S.
DayTwo raised $85 million to develop and market kits that personalized proper nutrition for diabetic patients based on their stool samples. The company's unique approach meant it would sometimes recommend foods like pizza, hamburgers with fries, or bread with butter, which it believed could be healthier for certain individuals. Through genetic analysis and sugar tests, the system provided personalized adjustments to food choices. While DayTwo demonstrated positive results in improving sugar levels, weight loss outcomes were inconclusive. Criticism also arose over the recommendation of foods that, despite their sugar-lowering benefits, were deemed unhealthy.
Despite initial enthusiasm and marketing through Israeli HMOs Maccabi and Clalit, who charged a one-time payment for the kits, the company's business model failed to generate profitability. Two years ago, CEO Lihi Segal, one of the founders, departed, and Dave Henderson, an American CEO, took over. The plan was to enter the U.S. market and adopt a subscription model with organizations and insurance companies, some of which signed agreements with the company. However, the emergence of diabetes injections like Ozempic, which offer both sugar level management and weight loss benefits, undermined DayTwo's target population.
Starting in 2023, cooperation between DayTwo and Maccabi and Clalit came to an end and it is no longer possible to order new kits. Only support for existing customers is provided. Calcalist also discovered that the company recently sold its laboratory and shifted operations to the U.S. through distributors. At the end of 2022, a significant downsizing took place, resulting in the dismissal of dozens of employees in both Israel and the U.S. DayTwo conducted further layoffs in recent weeks, including senior personnel.
Established in 2015, DayTwo was among the first and most prominent investments of Marius Nacht, one of Check Point's three founders, upon his transition into the medical field. The founding team also included CEO Lihi Segal (until 2021) and Yuval Ofek, who served as chairman. The current chairman is Yair Briman. Notable investors in the company include Nacht and Yair Schindel's aMoon fund, 10D, Cathay Innovation Ventures, Poalim Capital Markets, La’maison Fund, and Micron Ventures. In 2018, basketball player Omri Casspi also made an undisclosed investment after using DayTwo's kit and becoming its presenter in the Israeli market.
The company stated: "Like any startup, we constantly adjust our business model and personnel structure accordingly. For instance, our main solution in the U.S. is transitioning to a digital-based approach without dietitians, and we have introduced a new sales channel through distributors. R&D remains in Israel and continues to lead product development and research."
