weight-loss platform noom bulks up on $540 million in new funding

Weight Gain During the Pandemic Drives Noom's Growth

Recent data indicates a significant increase in weight among U.S. adults since the start of the pandemic. Approximately 61% of adults have experienced weight gain, averaging 15 pounds per person, as reported by the American Psychological Association.

This surge in weight concerns directly correlated with increased demand for Noom’s weight-loss application. Consequently, the company achieved $400 million in revenue during 2020, nearly doubling the $237 million earned in the preceding year.

Noom Secures $540 Million in Series F Funding

Building upon its successful 2020 performance, and with plans for expansion into new markets and product categories globally, Noom announced a $540 million Series F funding round.

Silver Lake spearheaded the investment. Additional participants included Oak HC/FT, Temasek, Novo Holdings, Sequoia Capital, RRE, and Samsung Ventures.

Focus on Behavioral Change

“Changing behaviors related to healthy eating, exercise, stress management, and sleep quality is a common desire, but often proves difficult,” stated Saeju Jeong, co-founder and CEO of Noom.

“This funding round demonstrates investor confidence in our ability to assist a large number of individuals in achieving healthier lifestyles through sustained behavioral modifications.”

The company also welcomed Adam Karol, managing director at Silver Lake, and Stacy Brown-Philpot, former TaskRabbit CEO, to its board of directors.

From Connected Bikes to Weight Loss

While the Noom app has now been downloaded 45 million times across 100 countries – including the U.S., U.K., Canada, Australia, Ireland, and New Zealand – the company’s origins trace back to 2007.

Initially, founders Jeong and Artem Petakov explored a different concept: a connected bicycle paired with a calorie-tracking application.

Early success was limited, however. It wasn’t until 2017, with the launch of a customer-centric, weight-loss focused app, that the startup found its footing and resonated with a broad audience.

Prior to this, in mid-2019, the company secured $58 million in funding, led by Sequoia.

Identifying a Viable Consumer Proposition

“Presenting a solution for complex health issues like hypertension often fails to capture consumer interest,” explains Noom president and co-founder Artem Petakov.

“We realized the need to identify a consumer-driven value proposition. Weight loss proved to be a compelling area where we could focus our efforts and achieve success.”

The Role of Cognitive Behavioral Therapy

Although the Noom app incorporates calorie tracking – a feature shared with other applications like MyFitnessPal, LoseIt, and MyPlate Calorie Counter – the company emphasizes the importance of cognitive behavioral therapy (CBT).

CBT, a goal-oriented psychotherapy, aims to help users understand and address the underlying triggers of negative thoughts, compulsive behaviors, and undesirable outcomes, contributing to long-term weight management.

Potential IPO on the Horizon

The future trajectory of Noom remains to be seen. A recent Bloomberg report suggests the company is exploring a potential Initial Public Offering (IPO) later this year or in early 2024.

The targeted valuation for the IPO is estimated to be close to $10 billion.