Noom, an app that helps people lose weight by focusing on behavior change, saw rapid growth in 2020 as people looked to shed pandemic-fueled pounds.
The digital health company is now looking to expand beyond weight loss to areas such as stress and anxiety, diabetes, hypertension and sleep. To help fuel this growth, the New York-based company is bulking up with $540 million in a Series F funding round.
The round was led by new investor Silver Lake with other new investors participating in the round including Oak HC/FT, Temasek, and Novo Holdings. Existing investors Sequoia Capital, RRE and Samsung Ventures also participated.
Noom’s sales reached $400 million last year, up from $200 million in 2019, Bloomberg reported.
The company also has met with potential advisers to discuss an initial public offering, eyeing a valuation of around $10 billion, Bloomberg also reported.
Noom will use the newly-raised capital to expand its behavior change platform to address a broad range of conditions, company executives said in a press release.
While the company has focused on individual consumers, Noom is looking to expand to employee benefits programs. A move into the enterprise market would put the company in direct competition with a growing list of digital health companies with solutions to help make employees healthier, such as Livongo, now owned by Teladoc, Lark Health, Virta Health and Omada Health.
A portion of the new capital is also being used for share repurchases as part of the company’s broader capital allocation framework.
The company is benefiting from significant tailwinds in healthcare now, including more empowered health consumers, the rise of chronic conditions and the associated healthcare costs, the shift in preventive care toward digital and virtual options, which was only accelerated by COVID-19 and the move toward outcomes-based care versus procedures and treatments.
Founded in 2010, Noom applies a psychology-based approach to health and wellness powered by data, technology, and human coaches that helps millions of people meet their personal health and wellness goals from weight management to diabetes prevention to stress reduction.
“Most people want to eat healthier, exercise more, be less stressed, and get better sleep, but it’s not easy to change these behaviors. 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,” said Saeju Jeong, co-founder and CEO of Noom said in a statement.
“I am energized by the tremendous momentum Noom has seen over the past year. 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,” he said.
The company also appointed two new board members—Adam Karol, Silver Lake managing director, and Stacy Brown-Philpot, former TaskRabbit CEO and SB Opportunity Fund Founding Member.
Brown-Philpot joins Noom as an independent director, bringing deep industry expertise in scaling mission-driven, consumer brands.
“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, and Karol. “We believe the company has only scratched the surface of how consumer-first technology can transform health and wellness, and are 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.”