DarioHealth, a global digital therapeutics (DTx) platform, has acquired Twill, a digital mental health company, in a cash deal amounting to USD 10 million and committed to issue around 10 million shares of common stock as pre-funded warrants. In conjunction with the acquisition, the company also announced a private placement of convertible preferred stock to raise USD 22.4 million.

The new funds will be allocated toward general corporate purposes.

Following this acquisition, Dario intends to create a comprehensive platform for chronic health conditions. By integrating Twill's digital solutions, the company plans to widen its customer base, enhance operational efficiency, and accelerate profitability. The acquisition is expected to double Dario’s pro forma revenues in 2023 and gross margins to approximately 80%–85% by 2025.

Twill develops prescription-based digital therapeutics (PDTs) that require FDA approval and non-prescription treatments designed to treat mental health conditions, including stress, anxiety, and depression. It serves major national health plans, Fortune 100 employers, and major pharmaceutical companies. 

Analyst QuickTake: Despite maintaining strong business momentum, Dario has consistently incurred operational losses, resulting in a net loss of USD 62.2 million for FY2022 . The company is optimistic about achieving profitability within the second year after acquiring Twill. This confidence is bolstered by its previous acquisitions, including the expansion into new therapeutic areas through the purchase of Upright Technologies and WayForward in 2021 and the addition of AI-based MSK care management company Physimax in January 2022.