Helping people lose weight and maintain a healthy weight is challenging and profitable. Recently, noom, a healthy weight loss exercise application, completed a round f financing of US $540 million, led by Silver Lake capital, followed by Oak HC / ft, Temasek, Sequoia Capital, Novo holdings, RRE and Samsung ventures. The company’s valuation reached US $3.7 billion.
Noom achieved $400 million in revenue in 2020 – almost twice as much as in 2019, and app downloads reached 4 million times. During the new year’s day this year, the number of platform registrations reached a new high. So far, noom has raised a total of about US $657.3 million. The company said that the current round of financing will be used for core business expansion, and on the basis of weight loss, it will include solutions to problems such as stress, anxiety, diabetes, hypertension and sleep. The company will also move to new locations and buy back shares.
Nearly 70% of users did not rebound after losing weight
Founded in 2008, noom is headquartered in New York and has offices in Seoul and Tokyo. The platform customizes personalized diet and fitness programs according to users’ life and eating habits, with a monthly package of $59. In addition to providing a diet plan designed by a registered dietitian, noom also designed these functions for users: recording meals, accessing exercise plans and tracking exercise, professional articles and recipes, weight loss goal setting, obtaining personal health coach support, weight loss motivation assessment, weight loss progress tracking, social networking, etc.
In other application platforms such as myfitnesspal, loseit and myplate calorie counter, users can also calculate daily calorie consumption. Noom’s advantage is to combine psychology and computer science to understand users’ personal motivation and obstacles, so as to help users form healthier habits, maintain healthy weight and achieve sustainable behavior change.
The platform believes that in the medium and long term, the key for users to lose weight successfully and maintain a healthy weight lies in receiving cognitive behavioral therapy, which is a goal-oriented psychotherapy, which can help people understand and fight against negative thoughts and forced behaviors in the process of weight loss. As a tool to help users change their behavior habits, noom helps people achieve their ideal weight through artificial intelligence, real-life coaches and physiological and psychological means based on clinical validation.
Saeju Jeong, co-founder and CEO of noom, said: “we help as many users live a healthy life through behavioral therapy. Investors believe that this part of the business has great growth potential.” According to the Centers for Disease Control and Prevention (CDC), nearly three-quarters of adults in the United States are overweight, and about 43% of adults meet the obesity standard. The term “freshman 10” is also popular in the United States. College students usually gain 10 pounds (about 4.5 kilograms) during their freshman year.
A report by the American Psychological Association (APA) in February showed that nearly 61% of adults in the United States have gained weight since the outbreak of the epidemic. 42% of respondents gained an average weight of about 13 kg (median 15 pounds, about 6 kg, known as “new crown 15”). Last spring, noom’s downloads and new user registrations increased. According to noom, up to 64% of users on the platform have successfully lost 5% or more of their weight; 60% of users will continue to lose weight for a year or more. A study conducted by noom on about 36000 users in 2016 showed that 78% of users lost weight when using the app, and nearly a quarter of users lost at least 10%.
The platform adopts the hybrid method of artificial intelligence and real-life coach. The data entered by the user will be transferred to the real-life coach, and the other party will immediately provide feedback and spiritual support to ensure that the user can stick to it. Compared with pure AI coach service, AI + live mode has tripled the weight loss effect.
There are more than 3000 full-time “noomers” on noom platform. They are full of enthusiasm and hope to use their business and skills to provide personalized counseling for everyone. The coach will guide users to determine their internal motivation for weight loss and carefully select rewards to ensure that the rewards are meaningful to users. For example, some health coaches will encourage users to buy game consoles for themselves after reaching the set goals, so as to make users change their behavior habits more effectively.
Dieting can help people lose weight in a short time, but the effect is often counterproductive. For many people, one of the great advantages of noom is to lose weight without dieting. The application divides daily food into red, yellow and green, and provides users with intake suggestions. For example, green labels are nutritious foods such as fresh agricultural products, and the software encourages people to eat more at ordinary times; Yellow labels are foods with high content of protein and starch; The foods with red labels are pizza, candy, alcoholic drinks, etc.
In addition, noom can solve social eating problems such as entertainment, allow users to plan ahead for upcoming meals or holidays, and promote real long-term behavior pattern change. Data show that noom’s weight loss effect is very lasting, and nearly 70% of users have not regained weight after using noom for a year.
At present, noom has aroused the resonance of many people eager to lose weight. Its application has been downloaded more than 45 million times in 100 countries / regions such as the United States, the United Kingdom, Canada, Australia, Ireland and New Zealand.
From weight loss to chronic disease management, noom may IPO within the year
Although it still focuses on serving individual consumers, noom has begun to plan to connect with corporate customers and insurance companies to help enterprises reduce costs and improve employees’ physical and mental health. The survey shows that 67% of Americans experienced excessive sleep or insomnia during the epidemic; 23% of adults drank more alcohol to cope with stress; 48% of parents said that life pressure had increased. As the company enters the next development cycle, Noom is trying to expand its core business from weight loss to chronic disease management, and use its cognitive behavior platform for remote treatment of stress, sleep, hypertension and diabetes.
Saeju Jeong says that many Noom users have health problems related to obesity, such as diabetes and hypertension. The company also wants to provide one-stop health services for users.
In May 2020, Noom announced cooperation with LifeScan, an old blood sugar maker, to launch a pilot project for weight loss in type 2 diabetes for clients using stable glucose meters and blood glucose test strips. The project will connect with Noom’s diabetes management data and track clinical outcomes and patient satisfaction. Subsequently, Noom published a study that recorded more than 14500 users aged 35 to 85 years in the course of four months, and confirmed that the flagship weight loss program had a significant effect on the elderly diabetes group. The prevalence of obesity and diabetes is rising in the middle and old age. With the increase in the population aged 60 and over, the demand for health interventions for all age groups is also increasing, “said Laura DeLuca, coordinator of clinical research at Noom.
In 2020, noom also established a partnership with eversana, a life science enterprise, to solve the problem of drug compliance in clinical trials, help participants manage drug side effects and establish a healthy lifestyle. In addition, noom cooperated with biopharmaceutical company Novo Nordisk to develop a new weight management education tool.
Noom’s “mobile diabetes prevention program” has been approved by China CDC and other agencies, and has been clinically verified in peer reviewed journals. In 2017, a study published in human hypertension magazine said that noom platform, as a portable terminal for hypertension prevention and management, can significantly benefit patients with chronic hypertension.
According to a study published in the American Journal of psychiatry, the combination of cognitive behavioral therapy, telemedicine counseling and noom treatment can effectively reduce patients’ symptoms compared with standard care. Noom also helps build healthier communities in the city where the company is located. The company worked with CityMD, an emergency medical care network provider in New York, to screen out patients with type 2 diabetes risk in the database to help users timely prevent and treat diabetes. Noom, Mount Sinai Hospital of Icahn school in New York and Kaiser Permanente conducted a 12 week monitoring cooperation program involving 200 people to help people with eating disorders better manage themselves.
Compared with other diseases, noom’s digital therapy for obesity is more mature. As a result, the management of chronic diseases requires the transformation of the company’s current products and continuous injection of funds“ I will not call expansion risk. In order to achieve growth, we must have real execution and focus“ Saeju Jeong said. It is reported that noom is preparing for its IPO later this year or early next year, with a target valuation of nearly $10 billion.
Noom has many competitors in the market. WW international, a fat reduction platform formerly known as weight watchers, added 4.2 million digital subscriptions in 2020, a year-on-year increase of 16%. Optavia provides coaching and catering services, and its revenue is expected to reach $1.4 billion in 2021, twice that in 2019. There are also many large health enterprises in the track, such as OMADA health, intrapace, allirion technologies, etc.
Global investors’ demand for digital health projects maintained strong growth. Swedish developer kry raised $316 million to expand its platform, while Munich based Kaia health raised $75 million after its virtual physical therapy business grew by 600%. In addition, the Virta Health focused on the treatment of type 2 diabetes received a $133 million E round of financing to promote the development of its nutrition and coaching plan.
At the same time, companies such as CVS health, 7wireventures, accelmed and endeavor vision also raised hundreds of millions of dollars to launch a digital health investment fund. Some related platforms have been acquired by big brands in the field of digital health. Fitbit, a wearable giant, acquired twin, a health coach application, and one medical group acquired rise, a manufacturer of nutrition coach application, for us $20 million in 2016.