Time-sensitive HealthTech investment at attractive valuation
DayTwo: Precision nutrition to manage type 2 diabetes, chronic diseases
"We saw our medication usage decrease by 30%"
— Regional President, CEO, major US healthcare provider
- Leveraging microbiome database containing tens of thousands of deep sequencing samples and other clinical parameters with AI to create personalized, precision nutrition to help manage type 2 diabetes and other chronic diseases, improve outcomes, save healthcare costs
- 80K samples connected to full and longitudinal electronic medical records; potential to extend to additional therapeutic areas, including initial talks with pharma and food companies
- Partnerships with Fortune 1000 companies, major health insurers, pharma companies, food companies; pipeline of over 200 prospects
- Peer-reviewed research published over seven years with Mayo Clinic, Weizmann Institute in Nature, Cell and leading journals
- 140% YOY US revenue increase in 2022; 1:4 ratio valuation: existing ARR; projecting 440% YOY revenue increase in 2023
- $26.4M bookings and additional $6.2M of commitments at end 2022 to be materialized by end January 2023, including existing clients that renewed and/or increased targeted population along with new clients including a major healthcare system
- Experienced team led by newly appointed CEO Dave Henderson, ex-MVP Healthcare, Cigna, co-founder of Oscar Health
- Featured on ABC's Good Morning America, New York Times; winner of Roche's 2020 Diabetic Care Innovation Contest
- Targeting $20M Series A with participation of most existing investors
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Watch DayTwo featured on ABC's Good Morning America
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Dear Josb,
Diabetes is sweeping through America, affecting more than 37 million US citizens and costing more than $237B in direct healthcare and over $90B in reduced productivity. DayTwo is the first and only science-based company which uses deep sequencing of the microbiome to inform clients how to eat more healthily and improve their lifestyle, and has achieved impressive initial results with over 1,000 members.
DayTwo is now expanding to the US, creating partnerships with major corporations and healthcare providers in a B2B2C model that helps their members manage type 2 diabetes and other chronic diseases, cutting healthcare costs and increasing productivity. OurCrowd is investing in DayTwo. The details in this email are based on information received from, and verified solely by, the company.
The Problem
The effects of diabetes, both in terms of the cost of treatment and the effect on the quality of life, are enormous. In the US, the financial costs are largely paid by employers who insure over 49% of the population. American businesses are urgently searching for methods to combat diabetes and help stop the unhealthy lifestyle choices made by their employees which exacerbates the problems. Insurers are eager to cut the huge and rapidly rising costs of healthcare.
The Solution
DayTwo uses gut microbiome sequencing and other clinical parameters to better understand how each individual responds to various types of foods. It then uses this data to help members adjust meal choices in order to avoid or reduce sugar spikes. DayTwo's service includes microbiome sequencing, DayTwo's user-friendly app, and provides customers with personalized, professional advice and support from a dietitian.
DayTwo has amassed the world's largest library of deep microbiomic samples and data. DayTwo's app leverages this huge trove of data using proprietary AI algorithms to provide a personalized nutrition program for each user. Its science is based on more than seven years of research at the Weizmann Institute, Mayo Clinic and other leading research centers, and has been published in leading peer-reviewed journals including Nature, Cell, and the American Journal of Clinical Nutrition.
The Traction
The company pivoted in 2022 away from its base in Israel to address the US market with a sustainable B2B2C business model that contracts with major employers and healthcare providers, enabling them to reduce costs and increase employee health and productivity.
DayTwo achieved 140% YOY US revenue growth in 2022, with constant increase in enrollment each quarter, and projects a further 440% YOY revenue increase in 2023.
Since we launched this opportunity on the OurCrowd platform, DayTwo reached its target for the year with $10M additional bookings/commitments. The company ended 2022 with $26.4M in bookings and an additional $6.2M of commitments it expects to materialize by the end of January, 2023. These include existing clients that renewed and/or increased their targeted population by requesting to use DayTwo for additional indications of prediabetes and clinical weight management. New clients include a major healthcare system.
DayTwo has established partnerships with Fortune 1000 companies, major health insurers, and pharma and food companies. It has an additional pipeline of 163 more prospects.
A survey of users showed significant reduction in weight, stress and hunger, with notable increases in energy and quality of sleep.
"We were delighted, absolutely, at the results for the impact on our members," said the Regional President and CEO of one major US healthcare provider. "We saw our medication usage decrease by 30%, so patients that were on medication no longer required it or had significant decreases."
Future developments
Research shows that the gut microbiome is connected to many clinical conditions. DayTwo's database of 80K samples is connected to 30K full and longitudinal electronic medical records. DayTwo is looking at additional therapeutic areas, including one clinical trial that is about to start in a new field and initial discussions with pharma and food companies.
DayTwo was featured on ABC's Good Morning America and The New York Times, and won Roche's 2020 Diabetic Care Innovation Contest.
The Team
Dave Henderson, appointed as CEO in July 2021, has 35 years of healthcare experience. He was VP of S&M at healthcare giant Cigna (NYSE: CI) and Chief Marketing Officer at MVP Health Care (ASX: MVP). In 2012, Dave founded and was Head of Insurance at Oscar Health (NYSE: OSCR), a firm focused on utilizing technology, design, and data to humanize healthcare. During Dave's tenure, Oscar was worth over $3B. He was also founding CEO of Kaden Health. He leads an experienced team of healthcare technologists, scientific researchers and industry experts.
The Round
OurCrowd has a $5M allocation in this time sensitive up to $20M Series A round in which most existing large investors, including Marius Nacht, 10D and Cathay Innovation, are participating. The company currently has runway, including internals' investment, until August 2023. DayTwo says it is offering this round at an attractive valuation of 1:4 to its ARR to raise funds rapidly in order to accelerate the execution of its new business plan and US market rollout. The proceeds will be used to finance the company's expansion in the US, giving it sufficient runway ahead of an expected Series B financing round at the end of 2023.
The DayTwo Solution
DayTwo uses microbiome sequencing and extensive analysis of a member's microbiomic make up and other clinical parameters to better understand how each individual responds to certain types of foods, enabling them to advise the client on how and what to eat in order to avoid or reduce sugar spikes. DayTwo's service includes microbiome sequencing, the ability to use the app and professional, personalized nutritionist support, guiding the customer along the way to a healthier life. In addition, the company has a database of tens of thousands microbiome samples with 80K connected to full and longitudinal electronic medical records, with the potential to develop solutions to many other conditions that are connected to the microbiome.
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