One of Israel’s most exciting startups DayTwo, which developed a microbiome precision and personally based personalized nutrition system has shut down. Ultimately the company’s platform was not distinct enough from other nutritional menus, and even though it gained initial popularity among individual customers, the platform was not adopted by health services.
DayTwo, which was founded in 2015, was based on the groundbreaking research of two researchers from the Weizmann Institute of Science, Profs. Eran Segal and Eran Alinav. The two have been pioneers worldwide in the field of human microbiome research - the composition of bacteria found in the human body. It is a composition of bacteria that has a critical effect on our health, which changes in response to environmental changes
The researchers found that different people, with different microbiome compositions, react differently to different foods, in terms of how these foods affect blood sugar levels. The promise was that there are diabetics who can eat ice cream, while broccoli would do them no good.
How do you turn these insights into a company? The beginning looked good. Among the first subjects in the experiment was the billionaire Marius Nacht, who decided to invest in the company. After an 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 rose and the company grew as it raised $85 million and had over 100 employees. 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 start Omri Casspi.
The right business model was not found
But the right business model was not found. Was this a medical product for diabetes management, or a nutritional product for everyone? Was the product a one-time recommendation for a personalized menu, or a package of nutritional support and coaching for life? Is what is important the diagnosis of gut bacteria, or is it possible to reach the same result by measuring the effect of different foods on sugar levels only?
DayTwo published articles showing its effectiveness, signed agreements with insurance companies and large employers, and yet, revenue did not grow at a high enough rate. Even during the Covid pandemic, the company’s sales were damaged.
Over the past two years, DayTwo made one last attempt to save its operations. The company cut its workforce to 35. The company examined whether its product could be integrated into the system of a larger company specializing in the management of chronic diseases. Meanwhile the company offered a limited version of its product through distributors. Investors even poured an additional amount into the company, to allow it to take its last chance, but to no avail.