CEO of Ozempic prescription startup Calibrate steps down as investors eye ‘rapid down-sizing’ of consumer business

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 it 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.

What’s X worth now? Well, let’s look at X’s employee equity compensation plan. Two sources familiar with the matter told my colleague Kylie Robison that X is putting employees RSUs at a share price of $45—valuing the company at $19 billion. That’s down more than half from what Musk paid for Twitter about a year ago: $44 billion.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Seurat Technologies, a Wilmington, Mass.-based 3D metal printing company, raised $99 million in Series C funding. NVentures and Capricorn’s Technology Impact Fund led the round and was joined by Honda Motor, Cubit Capital, and others. 

- Jiangsu Silicon Integrity Semiconductor Technology, a Nanjing, China-based chipmaker, raised 600 million yuan ($82 million) in new funding. SL Capital led the round and was joined by Panorama Capital.

- Betteromics, a Redwood City, Calif.-based analytics company for life science data, raised $20 million in Series A funding. Sofinnova Partners and Triatomic Capital led the round and was joined by SHAKTI.

- Aqtual, a Hayward, Calif.-based precision medicine company developing chronic disease and oncology products, raised $16 million in Series A funding from Genoa Ventures, Manta Ray Ventures, and Yu Galaxy.

- zeroRISC, a Boston, Mass.-based developer of cloud security services, raised $5 million in seed funding. Cambridge Angels led the round and were joined by others.

- Boundless Rider Insurance Agency, a Medford, Mass.-based insurance provider for motorcycle riders, raised $4.3 million in new funding. American Family Ventures led the round and was joined by Assurity Life Insurance Company and Belmont Capital.

- Cedar, an Austin,Texas-based platform designed for real estate developers and professionals to find urban areas where new housing can be built, raised $3 million in seed funding. Caffeinated Capital led the round and was joined by Tishman Speyer Ventures and others.

- Midwest Games, a Green Bay, Wisc.-based video game publisher, raised $3 million in new funding. TitletownTech led the round and was joined by Tundra Angels, Brightstar Wisconsin, Wisconsin Investment Partners, and others. 

- memox, a Zurich, Switzerland-based designer of meeting and conference rooms, raised €2.8 million ($3 million) in Series A funding. Swiss Prime Site and 41 Group led the round and were joined by others.

PRIVATE EQUITY

- Bernhard Capital Partners agreed to acquire the gas distribution business of Entergy, a New Orleans, La.-based gas provider, for roughly $484 million in cash.

- Authentic Restaurant Brands, a portfolio company of Garnett Station Partners, took Fiesta Restaurant Group, an Addison, Texas-based owner and operator of Pollo Tropical restaurant franchises, private for $8.50 per share. 

- Cloyes Gear & Products, a portfolio company of MidOcean Partners, acquired Rotomaster, a Vancouver, Canada-based turbocharger and component specialist for cars. Financial terms were not disclosed. 

- Fairbanks Morse Defense, a portfolio company of Arcline Investment Management, acquired American Fan, a Fairfield, Ohio-based developer of axial and centrifugal fan technology for the marine, industrial manufacturing, and building and construction industries. Financial terms were not disclosed. 

- Oakley Capital agreed to acquire a majority stake in Alerce, a Zaragoza, Spain-based provider of transport and logistics software solutions. Financial terms were not disclosed.

EXITS

- Outdoor Living Supply, a portfolio company of Trilantic North America, acquired Apache Stone, a Phoenix, Ariz.-based distributor of masonry, hardscape, and landscape supplies, from Halquist Stone Company. Financial terms were not disclosed.

IPOS 

- Lexeo Therapeutics, a New York City-based biotechnology company developing cardio and neuro disease therapies, plans to raise up to $135 million in an offering of 9 million shares priced between $13 and $15. D1 Capital Partners, PBM Capital Group, Janus Henderson Investors, Longitude Venture Partners, Lundbeckfond Invest, Eventide Asset Management, Omega GP, and Ronald G. Crystal, M.D. back the company. 

FUNDS + FUNDS OF FUNDS

- Andreessen Horowitz, a Menlo Park, Calif.-based venture capital firm, expects to raise roughly $3.4 billion for its next funds focused on early-stage and seed-stage startups, per Axios. 

- Korea Investment Partners, a Seoul, South Korea-based venture capital firm, raised $60 million for its first fund focused on tech startups in Southeast Asia.