An example of food groups from the Noom app.
Psychology-based digital health platform Noom today raised $540 million in a Series F round led by Silver Lake, with participation from Oak HC/FT, Temasek, Novo Holdings, Sequoia Capital, RRE, and Samsung Ventures. Silver Lake and technology leader Stacy Brown-Philpot will join Noom’s board of directors.
Like the “Freshman 10,” which refers to the number of pounds students typically put on during their first year in college, the “Covid 15” signifies the amount of weight U.S. adults gained during the pandemic. Noom’s weight-loss app was clearly a beneficiary, generating approximately $400 million in revenue in 2020, almost double the 2019 revenue. Noom reached a record number of signups during the most recent New Year’s season.
Noom saw an uptick in new user sign-ups last spring at the onset of the coronavirus pandemic, and saw the same level this spring as lockdowns neared an end. Throughout the year there are different triggers that motivate people to begin their journeys on Noom, from internal triggers such as negative self-talk to external ones such as clothes that fit pre-pandemic no longer fit. The end of the pandemic qualifies as a trigger, the company said.
“Our business was growing well before the pandemic and continues to grow,” Saeju Jeong, co-founder and CEO of Noom, told me. “Covid-19 has created a renewed focus on health and we’re seeing an increasing number of users indicate that they’re signing up to regain confidence, be healthier and rebuild good habits that were lost during the lockdowns. Our sights have been set on helping as many people as possible live healthier lives, and we’ll continue toward this mission well after the pandemic ends. We believe that the desire to live a healthier lifestyle is permanent.’
Noom applies a psychology-based approach to health and wellness by using behavior change and technology to create long-term positive health outcomes, the company said. With more than a decade of research, under its skinny-waisted belt, Noom has developed innovative products including its consumer-first platform and flagship weight management program. Users have found success leveraging the company’s combination of technology, human coaches, and behavioral science to take control of their health.
Building on the strong foundation of its weight management business, Noom will use the newly-raised capital to “expand its highly-adaptable behavior change platform to address a broad range of conditions with meaningful opportunity to further generate positive change across the lives and health of its customers, including stress and anxiety, diabetes, hypertension, and sleep,” the company said.
The funds will also enable Noom to reach more people in more places—from new geographies to employee benefits programs. A portion of the new capital is also being used for share repurchases as part of the company’s broader capital allocation framework.
“Most people want to eat healthier, exercise more, be less stressed, and get better sleep, but it’s not easy to change these behaviors,” said Jeong. “This strategic round of funding reflects our investors’ confidence in the immense opportunity we have in building a business around helping as many people as possible live healthier lives through behavior change.
“I’m energized by the tremendous momentum Noom has seen over the past year,” Jeong said. “Adding a well-rounded group of seasoned investors, led by Silver Lake, and new board members, provides the right combination of insights, expertise, and relationships, in both technology and healthcare, as we continue to help people change their behavior for good and create transformational health outcomes.”
Brown-Philpot, who joins Noom as an independent director, was formerly CEO of TaskRabbit and SB Opportunity Fund founding member. She brings deep industry expertise is scaling mission-driven consumer brands. Also named to the board was Adam Karol, Silver Lake managing director.
“Noom is a pioneer and clear leader in building weight management solutions that combine sophisticated technology, human coaching and psychology to support long-term, positive health outcomes,” said Greg Mondre, Silver Lake’s co-CEO and managing partner. “We believe the company has only scratched the surface of how consumer-first technology can transform health and wellness, and we’re excited to partner with Saeju and the Noom team as they leverage their powerful platform to accelerate expansion into new chronic condition and behavioral health categories.”
Brown-Philpot said, “Noom is a true disruptor in the health and wellness industry, and I’m inspired by the company’s mission to help people everywhere live healthier lives. I look forward to working with Noom and contributing to the company’s continued growth and success.”
“Noom has achieved solid growth with strong dedication for their mission of helping people live healthier lives in a fast-changing environment,” said Hyejin Kim, Samsung Ventures’ senior investment manager. “As a longtime supporter of Noom, witnessing Saeju and the Noom team’s relentless pursuit of excellence has been truly inspirational. Participating in this round, we continue to be a proud partner as they grow further into the healthcare industry.”
