The digital weight-loss and wellness platform Noom has raised $540 million led by the private-equity firm Silver Lake, with participation from Oak HC/FT and Novo Holdings. The fresh round of capital gives Noom a $3.7 billion valuation, Bloomberg reported on Tuesday (May 25), citing sources.
The pandemic helped fuel the popularity of the diet coaching app, generating $400 million in revenues in 2020 compared to about $200 million in 2019, according to Noom CFO Michael Noonan, per Bloomberg.
The Silicon Valley platform also has plans to expand beyond weight loss into stress management, sleep improvement and the management of health issues like high blood pressure and diabetes. Noom presently works with individuals, but also has its sights set on widening its reach into corporate and health insurance firms.
The digital health industry is experiencing rapid growth, as numerous startups are competing in the space to encourage employers to use technology to curb medical costs and keep their workforces healthy. “That’s where we come in, and we get excited, because that’s very much our bread and butter,” said Andrew Adams, Oak HC/FT’s co-founder and managing partner, per Bloomberg.
Noom is also eyeing a public offering at an estimated $10 billion valuation and has already begun talking with possible advisers, the report noted.
Roughly 75 percent of U.S. adults in the U.S. are overweight and about 43 percent qualify as obese, Bloomberg reported, citing statistics from the Centers for Disease Control (CDC). Noom’s mission is to tackle the underlying psychology that can pack on the pounds and derail weight loss efforts. “We are building the world’s best behavior-changing platform,” Noom CEO Saeju Jeong told Bloomberg.
A CDC report from 2017 indicated that some 40 percent of American adults and nearly 20 percent of teenagers were overweight enough to be considered obese. At the time, it was the highest level ever recorded. The rise in obesity rates coincides with increased healthcare costs to manage ailments compounded by weight gain, including heart disease, diabetes, hypertension, cancer, joint and skeletal damage, and more.