One of the most exciting startups in Israel Day 2Energy Food, which developed a personalized diet based on microbiome precision, has closed its doors. Ultimately, the company’s platform wasn’t differentiated enough from other nutrition menus, and while it initially gained popularity among individual customers, health services didn’t embrace it.
DayTwo was founded in 2015, based on pioneering research by two Weizmann Institute of Science researchers, Prof. Irene Segal and Irene Alinav. The two are world leaders in the field of human microbiome research – the composition of bacteria found in the human body. It is the composition of bacteria that has a critical impact on our health, and which changes in response to environmental changes.
The researchers found that different people, with different microbial compositions, react differently to different foods in terms of how those foods affect their blood sugar levels. The promise was that there were diabetics who could eat ice cream, but broccoli wouldn’t do them any good.
How did these ideas turn into a company? It seemed good at first. One of the first participants in the experiment was billionaire Marius Nacht, who decided to invest in the company. After the initial investment, an agreement was also signed with Clalit Health Services, which marketed the product at a subsidized price to patients. At the same time, work began with health insurance companies abroad.
Sales soared and the company grew, raising $85 million and employing more than 100 people. In addition to Nacht, who invested personally as well as through his aMoon Fund, investors included Samsung Next, LongLiv Fund, Seventure Partners, La Maison Partners, J&J’s Innovation Fund, Poalim Equity and former Israeli NBA basketball player Omri Casspi.
No suitable business model found
But the right business model was not found. Was this a medical product for diabetes management, or a nutritional product for everyone? Was it a one-time recommendation for a personalized menu, or a package of nutritional support and lifelong coaching? Did it matter what the gut bacteria were, or could the same conclusion be reached by simply measuring the effect of different foods on sugar levels?
DayTwo published articles showing its effectiveness, and signed agreements with insurance companies and major employers, yet revenues were not growing at a high enough rate. Even during the Covid pandemic, the company’s sales were hurt.
Over the past two years, Day Two has made a last-ditch effort to save its operations. The company has reduced its workforce to 35 people. It has explored whether its product could be integrated into a larger chronic disease management system. Meanwhile, the company has offered a limited version of its product through distributors. Investors have even pumped in more money to give the company a last chance, but to no avail.
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