Calibrate, the weight loss startup backed by Founders Fund and Tiger Global, is making changes to its management team as investors restructure the company, according to an investor letter, internal correspondence seen by Fortune, as well as another person familiar with the changes.
Calibrate’s founder and chief executive, Isabelle Kenyon, is stepping down as CEO and will no longer oversee day-to-day operations, she confirmed in a Slack message sent to employees Monday afternoon that was seen by Fortune. In the note she stated she would be staying with the company as "founder." Calibrate CFO Dave Fielding will also step down, according to someone familiar with the matter. Potential replacements for both those roles are being interviewed, the person says. Calibrate executives Scott Honken and Ed Cudahy have been promoted to oversee day-to-day operations and will report directly to the board, according to Kenyon's Slack message.
It’s unclear whether the plans are final, nor when the company plans to officially implement them. When reached by Fortune, Calibrate CFO Dave Fielding said he was still with the company, declining to comment further.
Redesign Health, the startup studio that initially launched Calibrate in 2019 and that sent the letter to its investors seen by Fortune, will play an active role in facilitating the restructuring, according to the letter. So will Madryn Asset Management, the alternative asset management firm that lent Calibrate the majority of its funding this year.
"We are still very confident in the business' trajectory, especially with the financial support Madryn is providing in order to put the company on a path to profitability," a Redesign Health spokeswoman said in a statement, noting that Redesign will provide "day-to-day support for Calibrate’s operational, financial, and planning efforts."
Calibrate launched in 2019 to help patients achieve weight loss. The company prescribes patients GLP-1 medications typically used to treat Type 2 diabetes, such as the popular drug often used for weight loss Ozempic, via telemedicine. The platform also offers video coaching for patients on things like nutrition, exercise, sleep, and emotional health. As demand for Ozempic skyrocketed, Calibrate racked up more than $160 million in capital from venture capital firms including Founders Fund and Tiger Global. Calibrate had started working with an employer to provide metabolic health services.
But the company has run into trouble this year. Calibrate had to refund many patients’ subscription fees due to medication shortages, the letter states, and the company has not been able to raise equity funding. Insider reported that the company let go of about 250 people over two rounds of layoffs. To make matters worse, acquisition talks this summer between Calibrate and a “large healthcare leader” fizzled, according to the letter. (Redesign said in the letter that its believes a future transaction between that company or another are still possible)
Now Calibrate’s investors are stepping in to reshuffle management, start a “rapid down-sizing” of Calibrate’s direct-to-consumer operations, and get the company to profitability, according to the investor letter. As part of the restructuring, Madryn Asset Management and other investors will deploy another $20 million of cash into the company to make the changes needed to get it to profitability, according to the letter.
Redesign told some investors in its first venture fund that it had marked down its Calibrate investment to 1x.
“An attractive outcome has become less likely,” the letter reads.
