The flash flood of ViVE news is officially here, and one of the biggest stories from the first wave was DarioHealth’s acquisition of mental health digital therapeutics startup Twill for $10M plus another $20M in stock.
Dario got its start in 2011 with a direct-to-consumer diabetes app before expanding to cardiometabolic, musculoskeletal, and behavioral conditions. Although Dario still operates its D2C business, it’s since shifted its primary market to employers and health plans to reach larger patient populations.
- Dario hasn’t shied away from fueling its expansion through M&A, most recently acquiring a trio of companies in 2021 that included wayForward (behavioral health), Upright (MSK), and Physimax Technologies (also MSK).
- Despite the momentum, Dario hasn’t notched a profitable year since going public in 2016, and it’s looking to Twill to help expedite that journey.
Twill provides configurable Sequences that combine its digital therapeutics with partner solutions to address specific clinical needs such as mental health (Happify) and pregnancy (Elevance).
- These Sequences are used by three of the five largest US health plans, over half of the top 20 global pharmaceutical companies, and reportedly cover 18 million lives.
- Twill raised $153M through 2021, so while some quick napkin math probably suggests this wasn’t exactly a glowing exit for investors, the stock-based transaction at least means that there’s some upside if the combined company succeeds.
Outside of the immediate scale achieved through Twill’s customer-base, Dario is banking on its newly consolidated offering striking a chord with employers that are grappling with point solution fatigue and workers in need of mental health support.
- During Dario’s last investor call, it said that it expects to reach breakeven at ~$80M in revenue (about 4x what it currently generates in a year), but Twill should help in this department.
- Since Twill and Dario share minimal customer overlap, joining forces should allow them to cross promote their services, and Dario expects the acquisition to double its revenue this year as a result.
The Takeaway
At a time when the market is demanding more value from fewer vendors, Dario’s acquisition of Twill is promising to deliver just that. All eyes will be on the integration of Twill’s platform to see if the expected revenue gains will be realized, but Dario has a track record of successfully folding in acquired companies, so this could end up being one of the first dominoes to fall in a long-awaited chain of consolidation.
